Asked by Janae Terrell on Sep 24, 2024
Verified
Due to a boom in the US,the average rate of return on investments is likely to rise causing the US dollar to
A) Appreciate
B) Depreciate
C) Not change in value
D) None of the above
Average Rate of Return
A financial metric that calculates the return on an investment relative to its cost, expressed as a percentage.
US Dollar
The official currency of the United States, widely used in international transactions and considered one of the world's dominant reserve currencies.
Investments
The process of assigning funds or other resources in the hopes of earning profits or returns.
- Familiarize oneself with the determinants influencing the need for currency and fluctuations in exchange rates.
- Assess the impact of economic states, like recessions and expansions, on the value of the home currency.
Verified Answer
TG
Taylor Gutierrezabout 5 hours ago
Final Answer :
A
Explanation :
When the US experiences a boom and the rate of return on investments rises, it signals to investors that there are profitable opportunities in the US economy. As a result, more foreign investors will want to invest in the US, increasing the demand for the dollar and causing its value to appreciate.
Learning Objectives
- Familiarize oneself with the determinants influencing the need for currency and fluctuations in exchange rates.
- Assess the impact of economic states, like recessions and expansions, on the value of the home currency.