How does increasing the exchange rate affect in... - SS2 Economics Control of Inflation/Deflation Question
How does increasing the exchange rate affect inflation?
A
It decreases demand for exports and increases inflation
B
It decreases demand for imports and decreases inflation
C
It increases demand for exports and decreases inflation
correct option: b
(A higher exchange rate can decrease demand for imports and control inflation, by way of decreasing it).
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