Due to a boom in the US,the average rate of return on investments is likely to rise causing the demand for US dollar to
A)Increase
B)Decrease
C)Not change
D)None of the above

Question

Due to a boom in the US,the average rate of return on investments is likely to rise causing the demand for US dollar to ​
A)​Increase
B)Decrease
C)Not change
D)​None of the above

Quizplus · Accepted Answer

With an increase in the rate of return on investments, there will be a higher demand for US investments, which will lead to an increase in demand for the US dollar. This is because foreign investors will need to exchange their currency for US dollars in order to invest in the US. Therefore, the answer is A) Increase.

Due to a Boom in the US,the Average Rate of Return