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Question #47711

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

Options:

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

Answer: Under a system of floating exchange rates there is a general tendency for the currencies of relatively high-inflation countries to depreciate.

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