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why a high rate of inflation tends to worsen balance of payments
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Question
Why a high rate of inflation tends to worsen balance of payments ?
A
Prices of imported goods rise
B
Prices of imported goods fall and hence more is imported
C
Prices of exported goods rise making exports less competitive
D
Prices of exported goods fall and hence less amount is obtained in terms of foreign exchange
Answer & Explanation
Option: [C]
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