Question Details

Why would exporters want lower interest rates 



1. Why would they do this? 
a)	to maintain a low exchange rate with the U.S. dollar 
b)	to avoid inflation 
c)	to help the U.S. 
d)	to earn a lot of interest 

2. “In Europe, the weaker dollar has raised fears that a moderate recovery will be dampened.” Why would a weaker U.S. dollar affect Europe?” 
a)	European exports will fall 
b)	European imports will fall 
c)	European money supply will shrink 
d)	European taxes will need to rise 

3. “Exporters want the central bank to lower interest rates.” 
Why would exporters want lower interest rates ? 
a)	to reduce inflation 
b)	to increase employment 
c)	to create multiplier effects 
d)	to lower the exchange rate 

4. “On a net basis, foreigners sold a record $22 billion of long-term Treasury debt in November. A repeat performance would fuel market nightmares about _______ Treasury rates and a _______ dollar.” The blanks are best filled with 
	a)rising; rising b) rising; falling c)falling; rising d) falling; falling 
5. “Our nation- national saving rate is now running below 3 percent. In 1960 it was close to 13 percent. Our incredibly low saving rate has lead to an incredibly high current account deficit.” This high current account deficit has happened because of 
a)	a high interest rate 
b)	a high exchange rate 
c)	high capital inflows 
d)	all of the above 




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