if-both-us-interest-rates-and-foreign-income-increase-simultaneously-what-is-the

Question

If both US interest rates and foreign income increase simultaneously, what is the likely impact on the exchange rate?

Accepted Answer

The exchange rate will likely increase due to higher demand for US dollars.

Answer

The exchange rate will fluctuate unpredictably.

Answer

The exchange rate will likely decrease due to higher supply of US dollars.

Answer

The exchange rate will remain unchanged.