Under What Circumstances Would a Country Tend to Experience Currency

question 24

Multiple Choice

Under what circumstances would a country tend to experience currency depreciation relative to other countries?

• A)Real interest rates rise relative to other countries.
• B)Traders in the foreign currency markets expect the value of the currency will fall in the near future.
• C)The foreign demand for its exports increases.
• D)The profitability of investments in other countries decreases relative to that country.