The three factors that have the most important impact on future exchange rate movement include the country's price inflation,its market philosophy,and its ______________.

Question

Quizplus · Accepted Answer

The interest rate has a significant impact on a country's exchange rate movement as it affects the demand for that country's currency. Higher interest rates attract foreign investors and increase demand for the currency, leading to an appreciation in its value. Conversely, lower interest rates decrease demand and cause depreciation. Price inflation and market philosophy can also play a role in exchange rate movement, but they are not as directly linked as the interest rate.

The Three Factors That Have the Most Important Impact on Future