how-do-higher-foreign-interest-rates-affect-the-supply-of-us-dollars-and-the-exc

Question

How do higher foreign interest rates affect the supply of US dollars and the exchange rate?

Accepted Answer

Increase the supply of US dollars, leading to a decrease in the exchange rate.

Answer

Increase the supply of US dollars, but the exchange rate increases.

Answer

Decrease the supply of US dollars, leading to an increase in the exchange rate.

Answer

Have no effect on the supply of US dollars or the exchange rate.