3447EconomicsMedium
For the United States suppose the annual interest rate on government securities equals 12 percent while the annual inflation rate equals 8 percent For Japan the annual interest rate on government securities equals 10 percent while the annual inflation rate equals 5 percent the above variables would cause investment funds to flow from?
AThe United States to Japan causing the dollar to appreciate
BThe United States to Japan causing the dollar to depreciate
CThe Japan to United States, causing the dollar to depreciate
DThe Japan to United States, causing the dollar to appreciate
Correct answer
B. The United States to Japan causing the dollar to depreciate
Explanation
The correct answer is The United States to Japan causing the dollar to depreciate.