A slowdown in U.S. economic growth will
A)boost the value of the dollar because inflation fears will be calmed
B)boost the value of the dollar because the Federal Reserve will expand the money supply
C)lower the value of the dollar because the U.S. will be a less attractive place to investors
D)lower the value of the dollar because interest rates will rise

Question

Quizplus · Accepted Answer

A slowdown in U.S. economic growth will make the U.S. a less attractive place to investors, leading to a decrease in demand for the dollar and lowering its value.

Answer: D 
 A slowdown in U.S. economic growth may lead to a rise in interest rates as the Federal Reserve tries to stimulate the economy. This can lead to a decrease in demand for the dollar and a lower value. Choices A and B are incorrect as they suggest that a slowdown in growth would boost the dollar's value, which is not the case.

A Slowdown in U.S. Economic Growth Will