A primary reason that explains the appreciation in the value of U.S dollar would be ?
Correct answer: D. high interest rates in the United States
- A. large trade surpluses for the United States
- B. high inflation rates in the United States
- C. lack of investor confidence in U.S money policy
- D. high interest rates in the United States
Explanation
High U.S. interest rates raise the return on dollar-denominated assets and attract foreign investment. The resulting demand for dollars tends to appreciate the dollar.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? [email protected]
About Macroeconomics
The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
Practise Macroeconomics
1,499 free Macroeconomics MCQs from Economics, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Discussion
Stuck on an option, or know a faster way to get there? Ask or explain it here.
No comments yet. Be the first to explain this one.
Exams that ask Economics questions like this
Economics is on 3 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Macroeconomics questions
The appreciation in the value of the dollar in the early 1980s is explained by all of the following except ?
If Canada runs a balance of payments surplus and exchange rates are floating ?
The exchange value of the U.S dollar is primarily determined by ?
In the presences of purchasing power parity, if one-dollar exchanges for 2 British pounds and if a DVD player costs $400 in the United States then in Britain the DVD player should cost ?
Relatively high real interest rates in the United States tend to ?
If a Big Mac hamburger sells for the same dollar value in New York as in London then ?