Asked by Shania Gaston on May 06, 2024

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If the inflation rate in the U.S.is higher than in other countries,the value of the dollar in international currency markets will be expected to

A) remain unchanged.
B) rise.
C) fall.
D) change in a manner that cannot be determined without information concerning the magnitudes of the shifts in the demand for and supply of dollars on international currency markets.

Inflation Rate

The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling.

International Currency Markets

Markets where currencies are traded internationally, crucial for determining foreign exchange rates.

Dollar

The currency unit of the United States, used as a standard monetary unit in international trade.

  • Recognize the influence of inflation rates on currency value in the international market.
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WA
Whitnee AbrielMay 13, 2024
Final Answer :
C
Explanation :
High inflation tends to decrease the value of a currency, as it reduces the purchasing power of that currency. Therefore, if the inflation rate in the U.S. is higher than in other countries, the value of the dollar in international currency markets will be expected to fall.