If real interest rates in the United States fell and real interest rates in England rose, we would expect people to:

Question

Quizplus · Accepted Answer

When real interest rates in the United States fall and those in England rise, it becomes more attractive to save in England due to higher returns and less attractive to borrow in the U.S. due to lower returns on savings. This leads to an increased demand for British pounds to invest in higher-yielding British assets, thereby increasing the demand for British pounds, encouraging borrowing from U.S. sources due to lower interest rates, and motivating purchases of more British assets for higher returns.

If Real Interest Rates in the United States Fell and Real