Which of the following statements is true? (a) If inflation in the rest of the world is lower than inflation in Brazil,
Posted: Thu May 19, 2022 8:10 am
Which of the following statements is true?
(a) If inflation in the rest of the world is lower than
inflation in Brazil, Brazil’s currency (the real) would tend to
appreciate.
(b) If Mexicans increasingly lose confidence in their
domestic financial markets and move their assets to other
countries, the peso will depreciate.
(c) Imports tend to fall whenever a nation’s currency
appreciates because foreign products become more expensive to
domestic consumers.
(d) A country that experiences higher real interest rates
than other countries would expect its currency to depreciate.
(a) If inflation in the rest of the world is lower than
inflation in Brazil, Brazil’s currency (the real) would tend to
appreciate.
(b) If Mexicans increasingly lose confidence in their
domestic financial markets and move their assets to other
countries, the peso will depreciate.
(c) Imports tend to fall whenever a nation’s currency
appreciates because foreign products become more expensive to
domestic consumers.
(d) A country that experiences higher real interest rates
than other countries would expect its currency to depreciate.