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Which of the following statements is true about the change in exchange rate? a) An increase in real interest rate leads to an appreciation of

Which of the following statements is true about the change in exchange rate?

a)

An increase in real interest rate leads to an appreciation of that nation's currency relative to other nations.

b)

An increase in nominal interest rates coupled with an equal increase in inflation rate will lead to an appreciation of that nation's currency relative to other nations.

c)

Political and economic risks have no significant impact on the exchange rate movement of a currency.

d)

High inflation rates tend to cause the domestic currency to appreciate in value relative to currencies of other countries.

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