Sweden's currency would tend to depreciate if:

Question

Quizplus · Accepted Answer

All three options would lead to a depreciation of Sweden's currency. 
A) If Sweden's inflation rate rises relative to inflation in the rest of the world, then Swedish goods become relatively more expensive, reducing demand for the country's exports and causing its currency to depreciate. 
B) An increase in the demand for imports would mean more Swedish krona are exchanged for foreign currency, increasing the supply of krona on the global currency market and causing its value to decrease. 
C) If real interest rates in Sweden are lower than in other countries, then investors will be less likely to invest in Sweden and more likely to invest elsewhere, decreasing demand for krona and again causing its value to decrease.

Sweden's Currency Would Tend to Depreciate If