If Pakistan's incomes rise faster than those in most other countries the the exchange value will tend to ?
Correct answer: C. depreciate
- A. fluctuate more than it would do otherwise
- B. appreciate
- C. depreciate
- D. not be affected
Explanation
Faster income growth usually raises demand for imports, increasing the supply of rupees in exchange markets and weakening the currency. Therefore, the rupee tends to depreciate.
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