Do you think that higher inflation rates in any country will lead consumers to use more...
Do you think that higher inflation rates in any country will lead consumers to use more digital currency? Why and Why not?
Homework Answers
Ans. Yes , there might be a case where high inflation would make people shift to digital currency because the supply of digital currency is fixed and does not increase , as the case with bitcoins. This means that there would be no monetary inflation in the case of bitcoins. But , there could be inflation with respect to the purchasing power due to demand and supply of bitcoins or trust issues. But still , people believe that digital currency is immune to inflation , which is not perfectly true.
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Do you think that higher inflation rates in any country will
lead consumers to use more...
India tends to have much higher inflation than Australia and also much higher interest rates than...
India tends to have much higher inflation than Australia and also much higher interest rates than Australia. Inflation and interest rates are much more volatile in India than in industrialised countries. The value of the Indian rupee is typically more volatile than the currencies of industrialised countries from an Australian perspective; it has typically depreciated from one year to the next, but the degree of depreciation has varied substantially. The bid/ask spread tends to be wider for the rupee than...
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7. Inflation, interest rates, and exchange rates Aa Aa E Relative inflation rates affect interest rates, exchange rates, the overall economic health of a country, and the operations and profitability of multinational companies. Consider the following statement: If a company borrows from a country with low interest rates, and the currency of the lending country appreciates, it becomes more expensive for the borrowing company to repay the initial loan. Based on your understanding of the relationship between relative inflation rates...
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