A country with demand-pull inflation decides to fix its exchange rates against other currencies above the purchasing power parities. What is likely to happen to the macroeconomic indicators shown?
- A country with demand-pull inflation decides to fix its exchange rates against other currencies above the purchasing power parities. What is likely to happen to the macroeconomic indicators shown? interest rate inflation rate current account balance A decrease decrease improve B decrease increase worsen C increase decrease worsen D increase increase improve[1]
Mark scheme
Marking points from the official mark scheme (May/June 2017). The mark or mark type is shown in brackets.
- [1] C
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