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    Question: If the U.S. and Japan engage in much capital flows but little trade, _______ directly influences their exchange rate the most. If the U.S. and Switzerland engage in much trade but little capital flows, _______ directly influences their exchange rate the most.

    a) interest rate differentials; interest rate differentials
    b) inflation and interest rate differentials; interest rate differentials
    c) income and interest rate differentials; inflation differentials
    d) interest rate differentials; inflation and income differentials
    e) inflation and income differentials; interest rate differentials

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    Solution Preview

    Question: If the U.S. and Japan engage in much capital flows but little trade, _______ directly influences their exchange rate the most. If the U.S. and Switzerland engage in much trade but little capital flows, _______ directly influences their exchange rate the most.

    a) interest rate differentials; interest rate differentials
    b) inflation and interest ...

    Solution Summary

    Answers a multiple choice question exchange rate.

    $2.49

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