Countries with high inflation will have the:
A) weakest currency.
B) highest nominal interest rate.
C) strongest currency.
D) highest real interest rate.

Question

Quizplus · Accepted Answer

Inflation erodes the purchasing power of a currency, which leads to a decrease in the demand for that currency in the foreign exchange market. This decreases the value of the currency and makes it weaker compared to other currencies. Therefore, countries with high inflation will have the weakest currency.

Countries with High Inflation Will Have The