If __________ are set to maintain the _____________, they cannot be set independently to influence the
Exchange rate.
A) tax rates, mortgage rates
B) tax rates, exchange rate
C) interest rates, mortgage rates
D) interest rates, inflation rates

Question

Quizplus · Accepted Answer

Interest rates are often set by central banks to control inflation. If they are used for this purpose, they cannot simultaneously be adjusted independently to directly influence the exchange rate, as both objectives would require different adjustments to the interest rates.

If __________ Are Set to Maintain the _____________, They Cannot

If Are Set to Maintain the ___, They Cannot