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Demand/Supply of currencies following changes in inflation

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If U.S. inflation suddenly increased while European inflation stayed the same, there would be:

A) an increased U.S. demand for euros and an increased supply of euros for sale.
B) a decreased U.S. demand for euros and an increased supply of euros for sale.
C) a decreased U.S. demand for euros and a decreased supply of euros for sale.
D) an increased U.S. demand for euros and a decreased supply of euros for sale.

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The solution answers a multiple choice question on the Demand and Supply of currencies following a change in relative inflation between US and Europe

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If U.S. inflation suddenly increased while European inflation stayed the same, there would be:

A) an increased U.S. demand for euros and an increased supply of euros for sale.
B) a decreased ...

Purchase this Solution
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