Key factors that influence currency exchange rates include which of the following

Question

Quizplus · Accepted Answer

Inflation rates are one of the most important factors that influence currency exchange rates as countries with lower inflation rates tend to have stronger currencies. A higher rate of inflation results in a decrease in demand for a currency, causing its value to decline. Production cost relationships, shipping rates, and reserve requirements also have an impact on exchange rates but to a lesser extent.

Key Factors That Influence Currency Exchange Rates Include Which of the Following