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Question 151

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Use the following to answer questions :
Scenario: Exchange Rate between the United States and India
Suppose that initially the nominal exchange rate was 40 rupees per dollar but it is now 50 rupees per dollar.
-(Scenario: Exchange Rate between the United States and India) Consider the scenario Exchange Rate between the United States and India. The real exchange rate will change by the greatest amount when the U.S. inflation rate is _____and the Indian inflation rate is _____.


A) zero; zero
B) 5%; 2%
C) 2%; 12%
D) 5%; 5%

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