2B8B COUNTRY A’S CURRENCY WOULD TEND TO APPRECIATE RELATIVE TO COUNTR...
194.
CSO: 2B8a
LOS: 2B8b
Country A’s currency would tend to appreciate relative to Country B’s currency when
a.
Country A has a higher rate of inflation than Country B.
b.
Country B has real interest rates that are greater than real interest rates in Country A.
c.
Country A has a slower rate of growth in income that causes its imports to lag
behind its exports.
d.
Country B switches to a more restrictive monetary policy.