A higher U.S. interest rate discourages Americans from buying foreign assets and encourages foreigners to buy U.S. assets.

Question

Quizplus · Accepted Answer

When U.S. interest rates are higher, Americans may opt to save their money domestically instead of investing in foreign assets with potentially lower returns. Conversely, foreigners may find U.S. assets more attractive due to the higher interest rates, leading to an inflow of foreign investment.

A Higher U