Under adjustable pegged exchange rates, if the rate of inflation in the United States exceeds the rate of inflation of its trading partners ?

A. U.S exports tend to rise, and imports tend to fall
B. U.S imports tend to rise, and exports tend to fall
C. U.S foreign exchange reserves tend to rise
D. U.S foreign exchange reserves remain constant

Correct Answer: U.S imports tend to rise, and exports tend to fall ✔

Last Updated: June 11, 2019