If the interest rate in Australia rises,overseas investors:

Question

Quizplus · Accepted Answer

When the interest rate in a country increases, overseas investors become attracted to investing in that country as it provides a higher return on their investment. To do this, they need to buy the country's currency, which in this case is the Australian dollar. Increased demand for the Australian dollar causes its value to increase, leading to a rise in the Australian exchange rate. Therefore, the correct answer is B - increase their demand for Australian dollars and the Australian exchange rate increases.

If the Interest Rate in Australia Rises,overseas Investors