The U.S. dollar exchange rate (units of foreign currency per U.S. dollar) for currencies of countries with high inflation rates relative to the United States has tended to ______, and the U.S. dollar exchange rate (units of foreign currency per U.S. dollar) for currencies of countries with low inflation rates relative to the United States has tended to ______.
A) appreciate; appreciate
B) appreciate; depreciate
C) depreciate; depreciate
D) depreciate; appreciate

Question

Quizplus · Accepted Answer

Countries with high inflation rates often have weaker currencies, which leads to a depreciation of their currency relative to the U.S. dollar. On the other hand, countries with low inflation rates tend to have stronger currencies, leading to an appreciation of their currency relative to the U.S. dollar.

The US Dollar Exchange Rate (Units of Foreign Currency Per U