A rise in the domestic and foreign growth rates leads to:
A) depreciation of the foreign currency
B) depreciation of the domestic currency
C) no change in the domestic currency
D) the effect cannot be determined without knowing the exact growth rates

Question

Quizplus · Accepted Answer

The effect on currency value depends on the relative growth rates and other factors, not just the fact that both are rising.

A Rise in the Domestic and Foreign Growth Rates Leads