If the Risk of Holding Assets in Foreign Countries Rises

question 166

Multiple Choice

If the risk of holding assets in foreign countries rises relative to the risk of holding U.S assets,then

• A)U.S.net capital outflow rises which increases the U.S.exchange rate.
• B)U.S.net capital outflow rises which decreases the U.S.exchange rate.
• C)U.S.net capital outflow falls which increases the U.S.exchange rate.
• D)U.S.net capital outflow falls which decreases the U.S.exchange rate.

---

Definitions:

Kissinger

Refers to Henry Kissinger, a significant figure in American foreign policy, known for his role as Secretary of State and National Security Advisor during the Nixon and Ford administrations, his diplomacy tactics, and his contributions to international relations.

Détente-Style Diplomacy

A strategy aimed at easing geopolitical tensions between nations, characterized by negotiation and cooperation rather than confrontation.

Zbigniew Brzezinski

A political scientist and statesman who served as United States National Security Advisor under President Jimmy Carter from 1977 to 1981, notable for his role in U.S. foreign policy during the Cold War.

Cyrus Vance

Cyrus Vance was a distinguished American lawyer and politician, serving as the United States Secretary of State under President Jimmy Carter.