Question

Drag the tiles to the correct boxes to complete the pairs. match each cause with the effect it has on an economy. higher interest rates in a country: a) higher currency value b) lower currency value c) more people adopting foreign clothing styles d) decrease in exports more foreign investment in a country: a) higher currency value b) lower currency value c) cultural imperialism d) increase in exports

Answer 1

Higher interest rates in a country lead to higher currency value, while more foreign investment leads to lower currency value.

Step-by-step explanation:

Higher interest rates in a country can have the effect of increasing the value of its currency. When interest rates are higher, foreign investors are attracted to invest in that country, increasing the demand for its currency and thus raising its value. So, the correct pairing for higher interest rates would be a) higher currency value.

On the other hand, more foreign investment in a country would lead to a lower value of its currency. When there is more foreign investment, it means that more investors are selling their domestic currency to buy the currency of that country, which increases the supply of its currency and thus lowers its value. So, the correct pairing for more foreign investment would be b) lower currency value.