Assume that the United States invests heavily in government and corporate securities of France. In addition, residents of France invest heavily in the United States. Approximately $7 trillion worth of investment transactions occur between these two countries each year. The total dollar value of trade transactions per year is about $4 trillion. Then directly influences their exchange rate the most. ---- inflation and interest rate differentials inflation differential only income differential only O interest ate differential only inflation and income differentials

Assume that the United States invests heavily in government and corporate securities of France. In addition, residents of France invest heavily in the United States. Approximately $7 trillion worth of investment transactions occur between these two countries each year. The total dollar value of trade transactions per year is about $4 trillion. Then directly influences their exchange rate the most. ---- inflation and interest rate differentials inflation differential only income differential only O interest ate differential only inflation and income differentials

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter29: International Finance

Section: Chapter Questions

Problem 4P

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