Raising interest rates to stave off currency depreciation
A) helps a country because high interest rates benefit savers and thus increases investment spending.
B) hurts a country because high interest rates are inflationary.
C) hurts a country because high interest rates reduce investment spending, aggregate demand, output, employment, and economic growth.
D) helps a country because high interest rates are a signal of a strong currency.
Correct Answer:
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A) hurts a country
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