Principles of Economics, 7th Edition

Published by South-Western College
ISBN 10: 128516587X
ISBN 13: 978-1-28516-587-5

Chapter 32 - Part XI - A Macroeconomic Theory of the Open Economy - Quick Check Multiple Choice - Page 703: 5

Answer

D) lower, stronger

Work Step by Step

When there is more money in the market because of foreign investment, interest rates decline. Because the U.S. economy (and by proxy, the U.S. dollar) is considered safe, then demand for the dollar will increase, making it a safer and stronger bet.
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