Chapter A6, Problem 7DQ

What happens over time to the currencies of countries with higherinflation rates than that of the United States? To those with lowerinflation rates?

If US dollars gets lower interest rates in the United States. How would this affect a fundamental forecast of foreign currencies? How would this affect the forward rate forecast of foreign currencies?

If the U.S. dollar has fallen in comparison with foreign currencies, which of the following statements is TRUE? U.S. products cost more for foreign consumers.      U.S. exports are likely to fall.     Foreign currencies buy fewer U.S. dollars.     U.S exports increase.