In a single month, the Russian ruble declined some 90 percent against the dollar. In Russia, which of the following policies could have slowed this decline?

Question

Quizplus · Accepted Answer

A reduction in the money supply could have slowed the decline of the ruble against the dollar by decreasing inflation and increasing the value of the ruble. Increasing the money supply (C) would likely exacerbate the decline, while changes in income tax rates (A and B) would have less direct impact on exchange rates.

In a Single Month, the Russian Ruble Declined Some 90