4. (TCO C) A strong dollar is normally expected to cause (Points : 5) high unemp

Question

4. (TCO C) A strong dollar is normally expected to cause (Points : 5)        high unemployment and high inflation in the United States.
       high unemployment and low inflation in the United States.
       low unemployment and low inflation in the United States.
       low unemployment and high inflation in the United States. Question 5.5. (TCO D) Assume that a currency's spot and future prices are the same and the currency's interest rate is higher than the U.S. rate. The actions of U.S. investors to lock in this higher foreign return would _____ the currency's spot rate and _____ the currency's futures price. (Points : 5)        put upward pressure on; put upward pressure on
       put downward pressure on; put upward pressure on
       put upward pressure on; put downward pressure on
       put downward pressure on; put downward pressure on Question 6.6. (TCO H) Other things being equal, the financial leverage of MNCs will be higher if the governments of their home countries are _____ likely to rescue them (in the event of failure) and if their home countries are _____ likely to experience a recession. (Points : 5)        less; more
       less; less
       more; less
       more; more 4. (TCO C) A strong dollar is normally expected to cause (Points : 5)        high unemployment and high inflation in the United States.
       high unemployment and low inflation in the United States.
       low unemployment and low inflation in the United States.
       low unemployment and high inflation in the United States.

Explanation / Answer

4)

Because of strong dollar interest rates are decrease and inflation also decrease but it fails in attracting foreign investros so unemployment increases.

Therefore, option B is correct.

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