Q. Under a system of floating Exchange rates, relatively low productivity and high inflation rates in the United States result in:
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(A)
An increase in the demand for foreign currency, a decrease in the supply of foreign currency, and a depreciación in the dollar
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(B)
An increase in the demand for foreign currency, an increase in the supply of foreign currency, and an appreciation in the dollar
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(C)
A decrease in the demand for foreign currency, a decrease in the supply of foreign currency, and a depreciation in thedollar
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(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)
An increase in the demand for foreign currency, a decrease in the supply of foreign currency, and a depreciación in the dollar