If Brazil experienced a period of rapid and unexpected inflation, causing Brazilians to lose confidence in the local currency (real)as a store of value, which of the following would be least likely to occur?

Question

Quizplus · Accepted Answer

It is unlikely that the real would be used as a store of value in other countries, as the loss of confidence in the currency would likely make it less appealing for foreign investors. A would be likely to occur, as the loss of confidence in the currency would lead to a decrease in its value on the foreign exchange market. B would also be likely to occur, as people would turn to foreign currency as a substitute for the real. D would be likely to occur, as people may save less in a currency that is losing value rapidly. E would also be likely to occur, as the loss of confidence in the currency would lead to a decrease in its purchasing power.

If Brazil Experienced a Period of Rapid and Unexpected Inflation