When Americans or foreigners expect the return on ________ assets to be high relative to the return on ________ assets,there is a ________ demand for dollar assets,everything else held constant.

Question

Quizplus · Accepted Answer

When the return on dollar assets is expected to be higher than the return on foreign assets, there is a higher demand for dollar assets. This is because investors will want to invest in the currency/asset that provides them with better returns. Therefore, choice B is the correct answer as it states that there is a higher demand for dollar assets when the return on dollar assets is expected to be higher than the return on foreign assets.

When Americans or Foreigners Expect the Return on ________ Assets