Unformatted text preview: _______ settlement balances. A) increase B) decrease C) inflate D) drain 10) When Canadians or foreigners expect the return on dollar assets to be high relative to the return on foreign assets, there is a ________ demand for dollar assets and a correspondingly ________ demand for foreign assets. A) lower; lower B) higher; higher C) lower; higher D) higher; lower 11) Everything else held constant, when the current value of the domestic exchange rate increases, the ________ of domestic assets ________. A) quantity supplied; does not change B) supply; decreases C) supply; increases D) quantity supplied; increases 12) A decrease in the domestic interest rate causes the demand for domestic assets to ________ and the domestic currency to ________, everything else held constant. A) decrease; appreciate B) increase; depreciate C) decrease; depreciate D) increase; appreciate 13) ________ in the foreign interest rate causes the demand for domestic assets to shift to the ________ and the domestic currency to appreciate, everything else held constant. A) An increase; left B) An increase; right C) A decrease; right D) A decrease; left 14) During the beginning on the subprime crisis in the United States when the effects of the crisis were mostly confined w...
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- Summer '09
- Exchange Rate, Bank of Canada, Dollar Assets