Anonymous
Anonymous asked in Social ScienceEconomics · 5 months ago

Suppose Home has a lower inflation rate than Foreign. In the long run, under the monetary approach...?

Suppose Home has a lower inflation rate than Foreign. In the long run, under the monetary approach, Home's currency will ____ against Foreign's.

A

appreciate

B

depreciate

C

maintain the same value

2 Answers

Relevance
  • 5 months ago

    A) appreciate

    Inflation causes a loss of purchasing power, which causes depreciation

  • Oiy
    Lv 6
    5 months ago

    I would go for A.

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