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| Assuming exchange rates are allowed to fluctuate freely, which one of the following factors would likely cause a nation's currency to appreciate on the foreign exchange market? A. A slower rate of growth in income than in other countries, which causes imports to lag behind exports. B. A relatively rapid rate of growth in income that stimulates imports. C. Domestic real interest rates that are lower than real interest rates abroad. D. A high rate of inflation relative to other countries. |