Question
Match the following economic indicators with their
expected impact on an economy An increase in the repo rate by the central bank Depreciation of the domestic currency A rise in the fiscal deficitSolution
- Repo Rate Increase (Contractionary): Higher rates discourage borrowing and spending.
- Currency Depreciation (Inflationary): Increases import costs, raising inflation.
- Fiscal Deficit Increase (Expansionary): Higher government spending stimulates demand
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