In the __________,the currency of a country with the higher inflation rate will __________ against the currency of a country whose inflation rate is lower.
A) short run;appreciate.
B) short run;depreciate.
C) long run;appreciate.
D) long run;depreciate.
E) long run;remain stable.

Question

Quizplus · Accepted Answer

In the long run, a country with a higher inflation rate will see its currency depreciate against a country with a lower inflation rate due to reduced purchasing power and demand for the higher-inflation currency.

In the __________,The Currency of a Country with the Higher