Author Question: To cool off an inflationary economy, a government might ________. A) lower interest rates B) ... (Read 41 times)

daltonest1984 · **on:** Jul 7, 2018

To cool off an inflationary economy, a government might ________.

A) lower interest rates
B) raise interest rates
C) lower foreign exchange rates
D) raise foreign exchange rates

Question 2

The exchange rate at the beginning of a year between the Indian Rupee (R) and the U.S. dollar is R43.125/. The annual inflation rates in India and in the United States are 19 percent and 3 percent respectively.

What would be the new exchange rate at the end of the year?
A) R49.8224/
B) R37.327/
C) R0.0267/
D) 37.327/R