In theory, if inflation is at an all-time high in the United States, then its currency will
A) increase in value when trading with countries in a political union.
B) appreciate against that of other countries where inflation is lower.
C) not be affected.
D) depreciate against that of other countries where inflation is lower.
E) increase faster than the money supply.

Question

Quizplus · Accepted Answer

High inflation typically leads to a depreciation of a country's currency relative to countries with lower inflation, as the purchasing power of the currency decreases.

In Theory, If Inflation Is at an All-Time High in the United