When Argentina experiences a period of high inflation and Argentineans lose confidence in their peso as a store of value, which of the following would be least likely to occur?

Question

Quizplus · Accepted Answer

When a country experiences high inflation, the demand for the domestic currency usually decreases, resulting in a decrease in its value. As a result, the buying power of the currency decreases, reducing its effectiveness as a store of value. Additionally, if the inflation is severe enough, it may result in citizens adopting a different currency as a medium of exchange, as seen in Zimbabwe in 2009. However, it is unlikely that the value of foreign currencies would depreciate relative to the peso in this scenario, as high inflation is generally associated with a weaker domestic currency, not stronger foreign currencies.

When Argentina Experiences a Period of High Inflation and Argentineans