Question

An increase in the interest rate should ________ the demand for dollars and the value of the dollar, and net exports should ________. group of answer choices

Answer 1

An increase in the interest rate should increase the demand for dollars and the value of the dollar, and net exports should decrease.Thus the correct answer is E.

What is Exports?

Exports is refers to sending of goods to foreign countries with the purpose of selling. The export help to strengthen the economy as ist brings more foreign currency into the country which boosts up the value of the economy.

An increase in the interest rate should increase the demand for dollars and the value of the dollar, and net exports should decrease. The demand for and value of the domestic currency rises when interest rates are higher because they tend to attract in foreign investment.

Therefore, option E is appropriate.

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Your question is incomplete, probably the complete question/missing part is:"

An increase in the interest rate should ________ the demand for dollars and the value of the dollar, and net exports should ________.

increase; not change

decrease; decrease

decrease; increase

increase; increase

increase; decrease