If real interest rates in the US are increasing faster than real interest rates in other countries, which of the following is most likely to occur?
a. the demand for dollars will decrease, and the value of the dollar will increase
b. the demand for dollars will increase, and the value of the dollar will increase
c. the supply of dollars will decrease, and the value of the dollar will increase
d. the supply of dollars will increase, and the value of the dollar will increase
e. the supply of dollars will increase, and the value of the dollar will decrease
Answer: b. the demand for dollars will increase, and the value of the dollar will increase
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