Question

A lower interest rate relative to other countries leads a nation’s currency to _______.

Select the two correct answers below.

Select all that apply:

• appreciate

• depreciate

• strengthen

• weaken

2.) Demand for the U.S. dollar comes from which of the following sources?

Select the correct answer below:

foreign investors who wish to make direct investments in the U.S. economy

foreign tourists visiting the United States

Foreign investors who wish to make portfolio investments in the U.S. economy

all the above

Answer 1

Ans.1

Correct Option is - Depreciate and weaken

Because it does not attract foreign countries to invest in , because of the lower interest rate or lower rate of return , the currency tends to depreciate and weaken .

On the other hand , having a high interest rate attracts foreign investments , which makes the currecy to appreciate and strenthen.

And.2

Correct Optio is - All of the above

All the options will require demand of U.S currency , because all transactions will be requiring the demand of U.S Dollars.

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