A country would tend to experience currency appreciation relative to other countries if:

Question

Quizplus · Accepted Answer

All three options contribute to a country's currency appreciation relative to other countries.

A) If a country's investments become more profitable compared to other countries, investors will be more likely to invest in that country, increasing demand for the currency and leading to its appreciation.

B) If people in foreign currency markets expect a currency value to rise in the future, they will want to buy that currency now, increasing its demand and leading to the currency's appreciation.

C) If foreign demand for a country's exports increases, the country will receive more foreign currency in exchange for its exports, increasing the supply of its own currency in exchange markets and leading to currency appreciation.

A Country Would Tend to Experience Currency Appreciation Relative to Other