Saturday, December 17, 2011

Interest rate.?

A fall in the domestic interest rate is likely to cause:


A. An increase of the level of government purchases;


B. A fall in the level of planned investment expenditure;


C. A fall in the foreign exchange value of the currency;


D. A fall in the level of aggregate demand;


E. None of the above.|||E. None of the above.





All the best :)|||How about C? e.g: fall in domestic interest rate would lead most of investors to shift their investments away from the country, and therefore the demand for the currency would decrease?

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|||d|||Only A|||I think E is the most appropriate answer.

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