Increases in the real interest rate will result in a(n):

Question

Quizplus · Accepted Answer

An increase in the real interest rate would lead to an increase in demand for US investments, which would result in an appreciation of the dollar. An appreciation of the dollar would make US exports more expensive for foreign buyers, leading to a decrease in net exports. Therefore, an increase in the real interest rate would result in a decrease in net exports, making option D the correct choice.

Increases in the Real Interest Rate Will Result in A(n)