Suppose real interest rates in the U.K. fell. U.S. investors would try to take advantage of this and cause a(n) _____ of the dollar.

Question

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When real interest rates in the U.K. fall, investments in the U.K. become less attractive compared to those in the U.S., leading U.S. investors to invest more domestically or in other countries with higher returns. This increases demand for the dollar as investors sell their pounds (or other currencies) to buy dollars, leading to an appreciation of the dollar.

Suppose Real Interest Rates in the U