In the early 1980s,high interest rates in the U.S.attracted enormous amounts of capital into the U.S.to buy stocks,bonds,real estate,and other assets.All other things being equal,supply-and-demand analysis of exchange rates would predict that the U.S.dollar would experience ___________ relative to other currencies.

Question

Quizplus · Accepted Answer

When there is an increase in the demand for a currency due to foreign investment, the value of that currency is expected to appreciate relative to other currencies. Therefore, in the scenario described in the question, the US dollar would experience an appreciation relative to other currencies.

In the Early 1980s,high Interest Rates in the U