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What is the relationship between interest rates and inflation?
  • a)
    Interest rates have no impact on inflation.
  • b)
    Higher inflation leads to higher interest rates.
  • c)
    Higher inflation leads to lower interest rates.
  • d)
    Inflation and interest rates are unrelated.
Correct answer is option 'B'. Can you explain this answer?
Most Upvoted Answer
What is the relationship between interest rates and inflation?a)Intere...
Higher inflation typically leads to higher interest rates. This is because central banks raise interest rates to counteract the inflationary pressures and stabilize the economy.
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What is the relationship between interest rates and inflation?a)Interest rates have no impact on inflation.b)Higher inflation leads to higher interest rates.c)Higher inflation leads to lower interest rates.d)Inflation and interest rates are unrelated.Correct answer is option 'B'. Can you explain this answer?
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