A decrease in U.S.federal government budget deficits that lowers U.S.interest rates relative to the rest of the world should
A)lower the trade balance.
B)decrease net exports.
C)cause the dollar to appreciate.
D)decrease the current account surplus.
E)increase foreign portfolio investment.

Question

Quizplus · Accepted Answer

Lower U.S. interest rates make U.S. assets less attractive, leading to increased foreign portfolio investment as investors seek higher returns elsewhere.

A Decrease in U