a) In your understanding, when do a country adopt inflation rate targeting? b) In your opinion,...

a) In your understanding, when do a country adopt inflation rate targeting?

b) In your opinion, have countries succeeded using foreign exchange rate as a target tool

c) With relevant diagram, show and explain what will be happen to the exchange rate and return of holding local assets if there is:

(i) a change in expected inflation rate, and

(ii) a change in interest rate in offshore market.

Expert Solution

Rahul Sunny answered 8 months ago

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