If a Japanese bank is paying 2% interest on savings and an American bank is paying 4% interest, the demand for dollars will _____, and the dollar will:

Name: If a Japanese bank is paying 2% interest on savings and an American bank is paying 4% interest, the demand for dollars will _____, and the dollar will:
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Question

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The demand for dollars will increase as investors seek the higher 4% interest rate offered by the American bank, leading to an appreciation of the dollar due to higher demand.

If a Japanese Bank Is Paying 2% Interest on Savings