What generally happens when a central bank unexpectedly decreases interest rates?
What generally happens when a central bank unexpectedly decreases interest rates?
The currency strengthens, then weakens.
The currency strengthens.
The currency weakens.
The currency weakens, then strengthens.
Homework Answers
Solution :-
The Correct Answer is ( C) That is Currency Weakens
when a central bank unexpectedly decreases interest rates than the Currency Weakens
There is a positive relationship Between interest rate and currency value . Lower interest rates tend to be unattractive for foreign investment and decrease the currency's relative value.
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What generally happens when a central bank unexpectedly decreases interest rates?
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