Under a Fixed Exchange Rate System, If the Inflation Rate

question 12

Multiple Choice

Under a fixed exchange rate system, if the inflation rate of the United States exceeds the inflation rate of other nations, the

• A) dollar will depreciate.
• B) dollar will appreciate.
• C) United States will develop a trade deficit.
• D) United States will develop a trade surplus.

---

Definitions:

Incompatibility

A situation where two or more substances or factors cannot coexist or work together without causing adverse effects.

Group Roles

The functions or parts played by individuals within a group context, which can vary from leadership and decision-making roles to support and maintenance functions.

Group Composition

The makeup or structure of a group, including the variety and characteristics of its members.

Focus

A central point of interest or activity.