Suppose the Federal Reserve Bank unexpectantly raises interest rates in the United States. How will this impact the foreign -exchange market?
Answer:
It would most likely attract foreign investment and hopefully stabilize the falling US$ against other currencies.
USD will appreciate with respect to some currencies because demand increases for investments in the $. People would rather invest here and earn, say 6% than somewhere else and get 4%.
And this has _________ to do with the environment?
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