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: A