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

1716EconomicsMedium

Under a system of floating exchange rates there is a general tendency for?

Aexchange rates to be insensitive to the differential rates of inflation between countries

Bthe currencies of relatively high inflation countries to appreciate

Cthe currencies of relatively high-inflation countries to depreciate

Dthe currencies of relatively low inflation countries to depreciate

Correct answer

C. the currencies of relatively high-inflation countries to depreciate

Explanation

The correct answer is the currencies of relatively high-inflation countries to depreciate.

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