Due to a recession in the US,the average rate of return on investments is likely to fall causing the demand for US dollar to
A)Increase
B)Decrease
C)Not change
D)None of the above

Question

Due to a recession in the US,the average rate of return on investments is likely to fall causing the demand for US dollar to ​
A)​Increase
B)Decrease
C)Not change
D)​None of the above

Quizplus · Accepted Answer

During a recession, when the average rate of return on investments is likely to fall, investors may choose to invest in other countries with higher rates of return, causing a decrease in the demand for the US dollar. This would lead to a depreciation of the US dollar against other currencies, resulting in a decrease in its value.

Due to a Recession in the US,the Average Rate of Return