Asked by Kaitlyn Foley on Jul 25, 2024
Verified
An inflow of investment funds into the United States from overseas is likely to result from a(n)
A) decline in expectations for economic growth in the United States.
B) growing belief among investors that the U.S. dollar ($) is overvalued.
C) rise in U.S. interest rates relative to world interest rates.
D) increase in the U.S. inflation rate.
Investment Funds
Pools of capital that are allocated to various securities or assets, managed by professional investment managers, intended to generate returns for investors.
Economic Growth
The increase in the total output of goods and services in an economy over time, often measured as the percentage increase in real gross domestic product (GDP).
U.S. Interest Rates
The rates at which borrowers are charged or lenders are paid for the use of money in the United States, set by the Federal Reserve.
- Understand the influence of global asset transactions on foreign exchange rates and trade balances.
Verified Answer
AR
Alejandra RosalesJul 26, 2024
Final Answer :
C
Explanation :
A rise in U.S. interest rates relative to world interest rates makes investing in the United States more attractive to foreign investors, as they can potentially earn higher returns on their investments compared to their home countries or other global options.
Learning Objectives
- Understand the influence of global asset transactions on foreign exchange rates and trade balances.