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Relatively high interest rates in the united states causes the dollar to ____ in the ____. a. appreciate, long run b. depreciate, long run c. appreciate, short run d. depreciate, short run
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Relatively high interest rates in the united states causes the dollar to ____ in the ____.

a. appreciate, long run

b. depreciate, long run

c. appreciate, short run

d. depreciate, short run

User Dominic Cronin
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1 Answer

6 votes

Answer:

a. appreciate, long run

Step-by-step explanation:

  • As when a currency has relative higher interest rates this means that the dollar will appreciate and hence maintain long-run stability. As the dollar can buy more than its equivalent.
  • This is also caused by the increase in the demands for the money in the home country and tends to attract foreign investments.
  • A longer run tend is more likely to be caused by inflation due to the higher interest rates the dollar.
User Graham Conzett
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