When the U.S. real interest rate falls, owning U.S. assets becomes
A)more attractive to both U.S. and foreign residents.
B)more attractive to U.S. residents and less attractive to foreign residents.
C)less attractive to U.S. residents and more attractive to foreign residents.
D)less attractive to both U.S. residents and foreign residents.

Question

Quizplus · Accepted Answer

When the U.S. real interest rate falls, the return on U.S. assets decreases, making them less attractive to both U.S. residents and foreign investors.