Suppose that the latest Consumer Price Index (CPI)release shows a higher inflation rate in the U.S. than was expected. Everything else held constant,the release of the CPI report would immediately cause the demand for U.S. assets to ________ and the U.S. dollar would ________.

Question

Quizplus · Accepted Answer

A higher inflation rate would make U.S. assets less attractive to foreign investors, leading to a decrease in demand for U.S. assets. This would cause the value of the U.S. dollar to depreciate.

Suppose That the Latest Consumer Price Index (CPI)release Shows a Higher