Suppose interest rates in the United States, but they don’t rise in other nations. As a result of this change The U.S. dollar appreciates The U.S. dollar depreciates U.S. exports will increase U.S. imports will decrease Price levels in the unites states will increase Suppose Americans began purchasing real assets in Europe. How would this impact the foreign exchange market for the euro and the dollar price of the euro? Decrease/increase Increase/ decrease Increase/increase Decrease/Decrease Decrease/Not change Suppose interest rates rise in the United States, but they don’t rise in other nations, what is the impact of flow of the financial capital, the value of the dollar, and U.S. net export (based on the changing value of the dollar)? Capital flow/ Value of the U.S. dollar/ Net exports Inflow/appreciate/Increase Inflow/appreciate/decrease Inflow/depreciates/increase Outflow/depreciates/increase Outflow/appreciates/decrease If the U.S experiences an increase in exports, ceteris paribus, then The U.S. dollar will appreciate because of increased supply of U.S. dollars by foreign nations The U.S. dollar will depreciate because of increased supply of U.S. dollars by foreign nations The U.S. dollar will appreciate because of increased demand of U.S. dollars by foreign nations The U.S. dollar will depreciate because of increased demand of U.S. dollars by foreign nations The U.S, dollar will depreciate and the U.S will import more foreign goods Solution Answer 1 : Suppose interest rate rises in the united states, but they dont rise in other nations. As a result there is increase in inflationary pressure. It is one of the monetary policy that fed has been used to achive maximum employment and stable price level. As a result there is US Dollar apperication. This shows that increase in interest rate tend people to save more and spend less in an economy. Answer 2 : When american start purchasing real assets in the europe. The impact is that there is increase in the forgien exchange market for euro and increasein the dollar price of the euro market. As a result that real assets has been purchased by them so the increase in exchange rate market as well as increase in the price of dollar in the market as they are investing in real assets. Answer 3 : As interest rate has been rised than the financial capital has been inflow, value of US Dollar appreciates and increase in the value of net exports. This result is that when interest rate rises the capital has been inflow and the value of the US Dollar has been appericates and increased in the value of the net export in the country because investment in the US country has become attractive place of investment. Answer 4 : If US experienced an increase in export, certies paribus than the US Dollar will appericate because of increase demand for US Dollar by forgien nation . This shows that dollar has been appericated when import has been increased and US goods has been more attractive so demand for US dollar has .

1. Suppose interest rates in the United States, but they don’t rise in other nations. As a result of this
change
The U.S. dollar appreciates
The U.S. dollar depreciates
U.S. exports will increase
U.S. imports will decrease
Price levels in the unites states will increase
Suppose Americans began purchasing real assets in Europe. How would this impact the foreign
exchange market for the euro and the dollar price of the euro?
Decrease/increase
Increase/ decrease
Increase/increase
Decrease/Decrease
Decrease/Not change
Suppose interest rates rise in the United States, but they don’t rise in other nations, what is the
impact of flow of the financial capital, the value of the dollar, and U.S. net export (based on the
changing value of the dollar)?
Capital flow/ Value of the U.S. dollar/ Net exports
Inflow/appreciate/Increase
Inflow/appreciate/decrease
Inflow/depreciates/increase
Outflow/depreciates/increase
Outflow/appreciates/decrease
If the U.S experiences an increase in exports, ceteris paribus, then
The U.S. dollar will appreciate because of increased supply of U.S. dollars by foreign nations
The U.S. dollar will depreciate because of increased supply of U.S. dollars by foreign nations
The U.S. dollar will appreciate because of increased demand of U.S. dollars by foreign nations
The U.S. dollar will depreciate because of increased demand of U.S. dollars by foreign nations
The U.S, dollar will depreciate and the U.S will import more foreign goods
Solution
Answer 1 : Suppose interest rate rises in the united states, but they dont rise in other nations. As
a result there is increase in inflationary pressure. It is one of the monetary policy that fed has
been used to achive maximum employment and stable price level. As a result there is US Dollar

2. apperication. This shows that increase in interest rate tend people to save more and spend less
in an economy.
Answer 2 : When american start purchasing real assets in the europe. The impact is that there is
increase in the forgien exchange market for euro and increasein the dollar price of the euro
market. As a result that real assets has been purchased by them so the increase in exchange rate
market as well as increase in the price of dollar in the market as they are investing in real assets.
Answer 3 : As interest rate has been rised than the financial capital has been inflow, value of US
Dollar appreciates and increase in the value of net exports. This result is that when interest rate
rises the capital has been inflow and the value of the US Dollar has been appericates and
increased in the value of the net export in the country because investment in the US country has
become attractive place of investment.
Answer 4 : If US experienced an increase in export, certies paribus than the US Dollar will
appericate because of increase demand for US Dollar by forgien nation . This shows that dollar
has been appericated when import has been increased and US goods has been more attractive so
demand for US dollar has been increased at faster speed.