1. A lower U.S. interest rate relative to interest rates abroad, ceteris paribus, will result in

1. a stronger dollar.
2. a weaker dollar.
3. a lower spot exchange rate (expressed as foreign currency per U.S. dollar).

1. I only
2. II only
3. III only
4. II & III only
5. None of the above choices

2. Which of the following statement(s) is/are false?

1. We should learn about the international trade because we live in a highly integrated world where many nations trade with each other.
2. Nations trade with each other because trading can improve the welfare of both countries.
3. In general, trading is a zero-sum game.

1. I only
2. II only
3. III only
4. I & II & III
5. None of the above answer