If interest rates in the U.S. increases relative to interest rates in Europe:

Question

Quizplus · Accepted Answer

When U.S. interest rates increase relative to those in Europe, investors are attracted to the higher returns in the U.S., increasing the demand for dollars to buy U.S. assets. This also increases the supply of euros as investors sell euros to buy dollars. Consequently, the price of U.S. assets should increase due to higher demand, making all the given answers correct.

If Interest Rates in the U