After the financial crisis of fall 2008, the perceived safety of investments held in the U.S. caused
A)U)S. interest rates to remain the highest in the world.
B)U)S. exports to equal U.S. imports.
C)the U.S. dollar to weaken relative to the euro.
D)the U.S. dollar to strengthen relative to the euro.

Question

Quizplus · Accepted Answer

The perceived safety of investments held in the U.S. caused investors to seek out U.S. dollars, which increased the demand for the currency and led to its strengthening relative to the euro. This is because investors viewed the U.S. as a safe haven for their assets, despite the financial crisis. Therefore, option D is the correct choice. Option A is incorrect because high interest rates typically attract investment, but the financial crisis caused interest rates to drop. Option B is unrelated to the question of safe investments. Option C is incorrect because the safe-haven status of the U.S. actually caused the dollar to strengthen, not weaken, against other currencies.

After the Financial Crisis of Fall 2008, the Perceived Safety