Which of the following statements correctly describes a relationship to exchange rates?(1 point)

Question

Responses

The exchange rate may fall if the currency is expected to appreciate.
The exchange rate may fall if the currency is expected to appreciate.

Lower exchange rates for a domestic country are associated with lower interest rates in that country.
Lower exchange rates for a domestic country are associated with lower interest rates in that country.

Higher interest rates in a domestic country are associated with lower exchange rates for its currency.
Higher interest rates in a domestic country are associated with lower exchange rates for its currency.

Lower inflation, relative to other countries, is associated with lower exchange rates.

Answer 1

Lower inflation, relative to other countries, is associated with lower exchange rates.