Which of the following helps explain the rise of the dollar against most major currencies in the late 1990s,even though the United States was still running a significant balance-of-payments deficit?
A)Increased government intervention in the foreign exchange market
B)Increased foreign investments in U.S.financial assets
C)Low real interest rates in the U.S.compared to the rest of the world
D)The fall of the Soviet Union and the communist bloc

Question

Quizplus · Accepted Answer

The driving force for the appreciation in the value of the dollar was that foreigners continued to invest in U.S.financial assets,primarily stocks and bonds,and the inflow of money drove up the value of the dollar on foreign exchange markets.

Which of the Following Helps Explain the Rise of the Dollar