Microeconomics: Principles, Problems, & Policies, 20th Edition

Published by McGraw-Hill Education
ISBN 10: 0077660811
ISBN 13: 978-0-07766-081-9

Chapter 25 - The Balance of Payments, Exchange Rates, and Trade Deficits - Discussion Questions: 8

Answer

The answer is below.

Work Step by Step

a. This is false because the more a country is doing well economically on the global scale, the more its currency will be worth. b. This is also false. Investors in currency are scared of inflation as this will make their money worth less. Thus, where inflation is high, investors are worried. c. This is true, for as people become more attracted to a country, they will be more attracted to the currency as well.
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