Under a system of floating exchange rates relatively... - Solved MCQs & Answer

1111EconomicsMedium

Under a system of floating exchange rates relatively low productivity and high inflation rates in the United States results in a (an)?

Aincrease in the demand for foreign currency an increase in the supply of foreign currency and a appreciation in the dollar

Bdecrease in the demand for foreign currency a decrease in the supply of foreign currency and a depreciation in the dollar

Cincrease in the demand for foreign currency a decrease in the supply of foreign currency and a depreciation in the dollar

Ddecrease in the demand for foreign currency and increase in the supply of foreign currency and a appreciation in the dollar

Correct answer

C. increase in the demand for foreign currency a decrease in the supply of foreign currency and a depreciation in the dollar

Explanation

The correct answer is increase in the demand for foreign currency a decrease in the supply of foreign currency and a depreciation in the dollar.

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