If one day the dollar is trading at 1.00 euro per dollar and the next day the exchange rate is 0.88 euros per dollar, one possible factor thatmight have led to this change isO a.an increase in the U.S. interest rate.Ob.the Fed buying dollars.Oc.the Fed selling dollars.d.a decrease in the European interest rate.

Exchange rate refers to the number of units of domestic currency is required to purchase of one unit…

If one day the dollar is trading at 1.00 euro per dollar and the next day the exchange rate is 0.88 euros per dollar, might have led to this change is O a. an increase in the U.S. interest rate. Ob. the Fed buying dollars. the Fed selling dollars. O d. a decrease in the European interest rate.

If one day the dollar is trading at 1.00 euro per dollar and the next day the exchange rate is 0.88 euros per dollar, might have led to this change is O a. an increase in the U.S. interest rate. Ob. the Fed buying dollars. the Fed selling dollars. O d. a decrease in the European interest rate.

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter13: Open-economy Macroeconomics: Basic Concepts

Section: Chapter Questions

Problem 5CQQ

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Question

If one day the dollar is trading at 1.00 euro per dollar and the next day the exchange rate is 0.88 euros per dollar, one possible factor that
might have led to this change is
O a.
an increase in the U.S. interest rate.
Ob.
the Fed buying dollars.
Oc.
the Fed selling dollars.
d.
a decrease in the European interest rate.

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