Under a system of floating Exchange rates, relatively low productivity and high inflation rates in the United States result in:

Ram Sharma • 193.84K Points
Coach Economic

Q. Under a system of floating Exchange rates, relatively low productivity and high inflation rates in the United States result in:

(A) An increase in the demand for foreign currency, a decrease in the supply of foreign currency, and a depreciación in the dollar
(B) An increase in the demand for foreign currency, an increase in the supply of foreign currency, and an appreciation in the dollar
(C) A decrease in the demand for foreign currency, a decrease in the supply of foreign currency, and a depreciation in thedollar
(D) A decrease in the demand for foreign currency, an increase in the supply of foreign currency, and an appreciation in the dollar

Correct Answer - Option(A)

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