If interest rates fall in the United States relative to the rest of the world,the demand for U.S.dollars will ________ because there is lesser demand for assets with ________ returns.

Question

Quizplus · Accepted Answer

When interest rates fall in the United States relative to the rest of the world, investors will find that there are better returns possible elsewhere. This causes the demand for U.S. dollars to decrease as investors are no longer interested in assets with lower returns.

If Interest Rates Fall in the United States Relative to the Rest