If interest rates in the U.S.increases relative to interest rates in Europe:

Question

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If interest rates in the U.S. increase relative to interest rates in Europe, investors will be more likely to invest in U.S. assets, which will increase the demand for dollars on the foreign exchange market. This will also lead to an increase in the supply of euros on the foreign exchange market, as investors sell euros to buy dollars. Finally, the price of U.S. assets should increase, as investors are willing to pay more for them due to the higher interest rates.

If Interest Rates in the U