In the foreign exchange market, when the U.S. interest rate rises, the supply of dollars_{--------------------} and the foreign exchange rate_{--------------------} .

Question

Quizplus · Accepted Answer

When the U.S. interest rate rises, foreign investors are attracted to U.S. assets, increasing demand for dollars and decreasing the supply of dollars in the foreign exchange market. This leads to an appreciation of the dollar, causing the foreign exchange rate to rise.

In the Foreign Exchange Market, When the U