Under a system of floating exchange rates relatively low pro

Under a system of floating exchange rates, relatively low productivity and high inflation rates in the United States result in: A. an increase in the demand for foreign currency, a decrease in the supply of foreign currency, and a depreciation in the dollar. B. an increase in the demand for foreign currency, an increase in the supply of foreign currency, and an appreciation in the dollar. C. a decrease in the demand for foreign currency, a decrease in the supply of foreign currency, and a depreciation in the dollar. D. a decrease in the demand for foreign currency, an increase in the supply of foreign currency, and an appreciation in the dollar.

Solution

An increase in the demand for foreign currency, a decrease in the supply of foreign currency, and a depreciation in the dollar