An Increase in a Country's Rate of Inflation Is Apt

question 59

Multiple Choice

An increase in a country's rate of inflation is apt to

• A)reduce its imports and improve its trade balance.
• B)lower its nominal rate of interest and encourage an inflow of capital.
• C)worsen its balance of trade and payments.
• D)decrease demand for the country's currency.

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Definitions:

Recall

The ability to retrieve and reproduce information from memory without being re-exposed to it since its original encoding.

Encoding

The process of converting information or an idea into a particular form, such as language or computer code, to communicate effectively.

Envy

A feeling of discontent or covetousness with regard to another's advantages, success, possessions, etc., often accompanied by a desire to have what someone else has.

Samsung

A multinational conglomerate based in South Korea, known for its electronics, appliances, and technology products.