Which One of the Following Statements Is Correct Assuming That

question 26

Multiple Choice

Which one of the following statements is correct assuming that exchange rates are quoted as units of foreign currency per dollar?

• A) The exchange rate moves opposite to the value of the dollar.
• B) The exchange rate rises when the Canadian inflation rate is higher than the foreign country's.
• C) When a foreign currency appreciates in value it strengthens relative to the dollar.
• D) The exchange rate falls as the dollar strengthens.
• E) The exchange rate is unaffected by differences in the inflation rates of the two countries.

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