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Question

Which of the following is NOT true regarding foreign interest rates?

a. The large flow of funds between countries causes interest rates in any given country to become more susceptible to interest rate movements in other countries.

b. If a foreign country is experiencing high inflation, its equilibrium interest rate is likely to be higher than the U.S. equilibrium interest rate.

c. An increase in a foreign country's interest rates will likely decrease demand for U.S. loanable funds by businesses in that country.

d. All of these are true regarding foreign interest rates.

Answer

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