When the U.S.real interest rate rises ________.
A)U.S.dollar assets earn a lower return relative to foreign assets
B)makes U.S.exports more expensive in foreign currencies
C)imports will decrease
D)all of the above
E)none of the above

Question

Quizplus · Accepted Answer

When the U.S. real interest rate rises, it makes the U.S. dollar appreciate. This appreciation makes U.S. exports more expensive in foreign currencies, which is accurately described in option B.

When the U.S.real Interest Rate Rises ________