________ in the foreign interest rate causes the demand for domestic assets to shift to the ________ and the domestic currency to appreciate,everything else held constant.

Question

Quizplus · Accepted Answer

A decrease in the foreign interest rate makes domestic assets more attractive compared to foreign assets, leading to an increased demand for domestic assets. This shift to the right in demand for domestic assets causes the domestic currency to appreciate as more foreign investors exchange their currency for the domestic currency to purchase domestic assets.

________ in the Foreign Interest Rate Causes the Demand for Domestic