Buy custom a)Why should every government be concern with inflationary pressure?
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This may lead to a further outward movement of capital due to the uncertainty. A depreciating exchange rate would mean the price of imported good would be higher and the economy may experience imported inflation. Domestic firms that import raw materials will want to pass on the increase in costs to customers...
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This is especially relevant to a country that depends significantly on foreign imports for production. Domestic price of exports would increase and this will further reduce the competitiveness of such goods in the domestic market.
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a)Why should every government be concern with inflationary pressure?
What actions might a government take in order to reduce the rate of inflation in the economy?
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