If economic growth perks up in the United States so that investors think they can realize larger profits from American assets, then the
A) supply of U.S. dollars will increase in the foreign exchange market.
B) the demand for U.S. dollars will increase in the foreign exchange market.
C) the demand for U.S. dollars will decrease in the foreign exchange market.
D) the demand for U.S. dollars will remain constant in the foreign exchange market.
Correct Answer:
Verified
Q95: If the U.S.interest rate rises relative to
Q96: If the current exchange value of the
Q97: The supply curve of dollars decreases (shifts
Q98: If the Federal Reserve increases interest rates
Q99: If the Federal Reserve decreases interest rates
Q101: In the long run, exchange rates are
Q102: According to the theory of purchasing power
Q103: The theory of purchasing power parity states
Q104: The U.S.interest rate minus the foreign interest
Q105: A relatively high rate of inflation in
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents