88.If the U.S. dollar appreciates relative to currencies in other countries, then U.S. imports: A.and exports will both increase. B.and exports will both decrease. C.will decrease and exports will increase. D.will increase and exports will decrease. 89.Use this scenario to answer questions 146–147.Scenario: Exchange Rate between the U.S. and IndiaSuppose that initially the nominal exchange rate between U.S. dollar and Indian rupee is such that 40 rupees exchange for $1. The nominal exchange rate has changed so that now 50 rupees exchange for $1.Reference: Ref 18-08(Scenario: Exchange Rate between the U.S. and India) Consider the information provided. If the nominal exchange rate is 50 rupees per dollar and the inflation rate in India is 25%, while the aggregate price level has remained unchanged in the U.S., then: A.the real exchange rate between the U.S. dollar and the Indian rupee remains unchanged at 40. B.the real exchange rate between the U.S. dollar and the Indian rupee remains unchanged at 50. C.the real exchange rate between the U.S. dollar and the Indian rupee increases from 40 to 50. D.the real exchange rate between the U.S. dollar and the Indian rupee increases by more than 25%. Interest rates between two countries tend to converge if: A.both countries have a financial account surplus. B.both countries have a current account surplus. C.the residents of the two countries believe that a foreign asset is as good as a domestic one. D.the residents of the two countries prefer their assets to foreign assets.