Final answer:
c. Rising inflation causes a decrease in a currency's buying power, leading to its depreciation as demand drops and supply increases.
Step-by-step explanation:
Among the options given, c) an increase in the price level, also known as rising inflation, would lead to currency depreciation. Inflation decreases a currency's buying power, making it less attractive to hold for international investors.
Consequently, the demand for a currency with higher inflation will decrease while the supply increases, prompting its value to drop in foreign exchange markets against other currencies.