When value of U.S. dollars goes down, ____.

Question

Quizplus · Accepted Answer

When the value of U.S. dollars goes down, foreign borrowers will have to pay back a smaller amount of their own currency to repay loans in dollars. Therefore, they will garner benefits. Bonds denominated in dollars may still produce returns, but not necessarily more returns. Foreign depositors in the U.S. will actually suffer from the decrease in the dollar's value as it means their deposits are now worth less in their own currency. Investors may not favor bonds denominated in dollars as they may seek other currencies with more stability.

When Value of U.S. Dollars Goes Down, ____