Case Interview Prep

Answer: B - Normal inflation does not affect the value of currency

Key Takeaway: Currency values are affected by demand flow and current supplies. High demand and low supply lead to an increase in the value of currency while low demand and high supply lead to a decrease in value. Current events, whether political, economic or social, can also affect the value of currency. If a country is on the brink of civil war or feuding over trade with its neighbors, then the value of its country is less due to the instability.