If a country has a high rate of inflation relative to Canada,our dollar will buy:
A) less of the foreign currency over time.
B) more of the foreign currency over time.
C) the same amount of the foreign currency over time.
D) an amount of foreign currency determined by the real exchange rate.

Question

Quizplus · Accepted Answer

If a country has a high rate of inflation relative to Canada, the value of its currency will likely decrease compared to the Canadian dollar, allowing the Canadian dollar to buy more of the foreign currency over time.

If a Country Has a High Rate of Inflation Relative