All else equal, if U.S.stocks are perceived to have become riskier compared to financial investments in other countries, then the market equilibrium value of the exchange rate for the U.S.dollar will:
A)rise.
B)fall.
C)become fixed.
D)be equal to the value chosen by the Federal Reserve.

Question

Quizplus · Accepted Answer

If U.S. stocks are perceived as riskier, foreign investors may demand fewer dollars to invest in the U.S., leading to a decrease in demand for the dollar and causing its value to fall in the foreign exchange market.

All Else Equal, If U