Why Might a Country Raise Interest Rates in the Face

question 230

Essay

Why might a country raise interest rates in the face of an exchange rate crisis?

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Definitions:

Federal Government

The national government of a federal state, which shares sovereignty with its sub-national entities and possesses its own powers and responsibilities distinct from those of state governments.

Government Shutdown

A situation where the government temporarily ceases operations due to the lack of approved funding.

Acceptable Budget

A financial plan or limit that is deemed satisfactory by those to whom it applies.

Ross Perot

An American businessman and politician known for founding Electronic Data Systems and running as an independent candidate in the 1992 U.S. presidential election.