Use the following to answer questions:
Suppose that initially the nominal exchange rate was 40 rupees per dollar,but it is now 50 rupees per dollar.
-(Scenario: Exchange Rate between Canada and India) Refer to Scenario: Exchange Rate between Canada and India.The real exchange rate will change by the greatest amount when the Canadian inflation rate is _____ and the Indian inflation rate is _____.
A) 0;0
B) 5%;2%
C) 2%;12%
D) 5%;5%
Correct Answer:
Verified
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