26. Assume that the interest rate in the home country of Currency X is a much higher interest rate than the U.S. interest rate. According to interest rate parity, the forward rate of Currency X: a. should exhibit a discount. b. should exhibit a premium. c. should be zero (i.e., it should equal its spot rate). d. Bor C 27. If inflation in New Zealand suddenly increased while U.S. inflation stayed the same, there woukd be a. an inward shift in the demand schedule for NZ$ and an outward shift in the supply b. an outward shift in the demand schedule for NZ$ and an inward shift in the supply c. an outward shift in the demand schedule for NZS and an outward shift in the d. an inward shift in the demand schedule for NZ$ and an inward shift in the supply schedule for NZ$. schedule for NZ$ supply schedule for NZ$. schedule for NZS. 28. Assume that British corporations begin to purchase more supplies from the U.S. as a r esult of several labor strikes by British suppliers. This action reflects: a. an increased demand for British pounds. b. a decrease in the demand for British pounds c. an increase in the supply of British pounds for sale. d. a decrease in the supply of British pounds for sale. 29. Any event that increases the U.S. demand for euros should result in a(n) in the value of the to other things being equal euro with respect a. increase; U.S. dollar b. increase; nondollar currencies c. decrease; nondollar currencies d. decrease; U.S. dollar 30. An increase in U.S. inflation relative to Singapore inflation places upward pressure on the Singapore dollar. a. True b. False 31. The value of euro was$1.30 last week. During last week the euro depreciated by 5%, what is the value of euro today? a. $1.365 b. $1.235 c. $1.330 d. $1.30