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Effect of Inflation on Trade

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A. How would a relatively high home inflation rate affect the home country's current account, other things being equal?

b. Is a negative current account harmful to a country? Discuss.

© BrainMass Inc. brainmass.com September 21, 2018, 2:04 am ad1c9bdddf - https://brainmass.com/business/international-business-strategy/effect-of-inflation-on-trade-188864

Solution Preview

a. How would a relatively high home inflation rate affect the home country's current account, other things being equal?

ANSWER: A ...

Solution Summary

This posting explains the effect of inflation on the current account, it briefly answers whether a negative current account is harmful to a country.

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