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Question : As a result of a higher rate of inflation in India, the US dollar will:

Option 1: depreciate

Option 2: constant

Option 3: negligible

Option 4: appreciate


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Team Careers360 24th Jan, 2024
Answer (1)
Team Careers360 25th Jan, 2024

Correct Answer: appreciate


Solution : The correct option is appreciated.

The US dollar will strengthen and the Indian rupee will weaken as a result of India's high rate of inflation. As a result, American goods will be imported into India at a higher rate and Indian goods will be exported to the United States at a lower rate, which will affect both the price of the Indian rupee in terms of dollars and the dollar exchange rate.

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