All Else Equal, If the Risk Associated with U

question 78

Multiple Choice

All else equal, if the risk associated with U.S. stocks is perceived to have fallen compared to financial assets in other countries, then the market equilibrium value of the exchange rate for the U.S. dollar will:

• A) rise.
• B) fall.
• C) become fixed.
• D) be equal to the value chosen by the Federal Reserve.