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QUESTION

Assume there is a decrease in U.S. interest rates relative to that of Britain. (a.) Would this event cause the demand for the dollar to increase or

Assume there is a decrease in U.S. interest rates relative to that of Britain.(a.) Would this event cause the demand for the dollar to increase or decrease relative to the demand for the pound? Why? (d.) If you had a business exporting goods to Britain, and U.S. interest rates fell as they have in this example, would you plan to expand production or cut back? Why?

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