Some countries have high interest rates and depreciating currencies because:
A) they are politically unstable
B) their central banks do not intervene in the foreign exchange market to support the currency
C) their inflation rates are high, making the real interest rates low
D) they do not have developed financial systems
Correct Answer:
Verified
Q1: An exchange rate is said to follow
Q2: A rise in the domestic inflation rate
Q4: A rise in the domestic and foreign
Q5: The government can affect the exchange rate
Q6: Central banks intervene in the foreign exchange
Q7: Which of the following is NOT an
Q8: Which of the following is NOT conducive
Q9: Expectations affect the exchange rate because:
A) arbitrageurs
Q10: A speculative attack on a currency is
Q11: 'News' as used in the exchange rate
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