Under a system of floating exchange rates there is a general tendency for ?

A. exchange rates to be insensitive to the differential rates of inflation between countries
B. the currencies of relatively high-inflation countries to depreciate
C. the currencies of relatively high inflation countries to appreciate
D. the currencies of relatively low inflation countries to depreciate

Correct Answer: the currencies of relatively high-inflation countries to depreciate ✔

Last Updated: June 11, 2019