Q. Consider the following statements in reference to inflation in the USA and its impact on other emerging economies:

Which of the statements given above is/are correct?

1 and 2 only

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2 and 3 only

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1 only

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1, 2 and 3

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Solution

The correct option is A 1 and 2 only
Explanation:

With the USA registering the highest inflation rate in the last three decades there are hopes that the fed will be increasing the interest rates soon.

If the rates are hiked, it will put pressure on the emerging market economy currencies such as the Indian rupee.

This may also force the central banker in India to raise the interest rates, which will contribute to inflation in the domestic market.

It will cause the outflow of money from the emerging markets.

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Q. Consider the following statements in reference to inflation in the USA and its impact on other emerging economies: Which of the statements given above is/are correct?

Q. Consider the following statements in reference to inflation in the USA and its impact on other emerging economies:

Which of the statements given above is/are correct?