Which one of the following statements is the most accurate?

Question

Quizplus · Accepted Answer

This statement correctly describes the relationship between the U.S. interest rate, the expected exchange rate, and the value of the U.S. dollar. When the interest rate offered by dollar deposits increases, investors are attracted to invest in the U.S., which leads to an increase in demand for dollars and a corresponding appreciation of the U.S. currency. This relationship holds constant when the euro interest rate and the expected exchange rate remain the same. Therefore, D is the most accurate statement.

Which One of the Following Statements Is the Most Accurate