Interest rates in the United States rise relative to interest rates in other countries. As a result, in the foreign exchange market

Question

Quizplus · Accepted Answer

When interest rates in the United States rise relative to other countries, foreign investors are more attracted to U.S. assets, increasing the demand for dollars to invest in these assets. This results in a leftward shift of the supply curve of dollars as fewer dollars are supplied for foreign exchange.

Interest Rates in the United States Rise Relative to Interest