When the U.S.real interest rate rises ________.
A)U.S.dollar assets earn a higher return relative to foreign assets
B)makes U.S.exports cheaper in foreign currencies
C)imports will decrease
D)all of the above
E)none of the above

Question

Quizplus · Accepted Answer

When the U.S. real interest rate rises, U.S. dollar assets become more attractive to investors, offering higher returns compared to foreign assets. This does not directly make U.S. exports cheaper nor does it necessarily decrease imports.

When the U.S.real Interest Rate Rises ________