All else equal, if the risk associated with U.S. stocks is perceived to have fallen compared to financial assets in other countries, then the market equilibrium value of the exchange rate for the U.S. dollar will:

Question

Quizplus · Accepted Answer

If U.S. stocks are perceived to have become less risky compared to financial assets in other countries, foreign investors will look to make financial investments in the United States. This increases the world demand for dollars and the exchange rate for the U.S. dollar will rise.

All Else Equal, If the Risk Associated with U