A decrease in U.S. interest rates relative to Japanese interest rates will
A) decrease the supply of dollars on the foreign exchange market
B) increase the demand for dollars on the foreign exchange market
C) increase the supply of dollars on the foreign exchange market
D) cause the value of the dollar to appreciate
E) cause U.S. exports to increase

Question

Quizplus · Accepted Answer

When U.S. interest rates decrease relative to Japanese rates, investors may seek higher returns in Japan, increasing the supply of dollars as they exchange them for yen.

A Decrease in U