A country facing demand-pull inflation decides to peg its exchange rates to other currencies at levels above purchasing power parities. What is likely to happen to the macroeconomic indicators shown?
- Ainterest rate decrease / inflation rate decrease / current account balance improve
- Binterest rate decrease / inflation rate increase / current account balance worsen
- Cinterest rate increase / inflation rate decrease / current account balance worsen
- Dinterest rate increase / inflation rate increase / current account balance improve