Multiple choice

Directions: Choose the correct word for blank (4).

If India wants to ___ (1) ___ the rupee and keep her capital account open, the use of monetary policy to ___ (2) ___ growth by increasing money supply and reducing interest rates will have to be sacrificed. If she wants to have a stable rupee and use monetary policy to ___ (3) ___ growth, these can be accomplished through capital controls. If she prefers an open capital account and a strong monetary policy, the rupee will remain ___ (4) __. Pessimism regarding its downward slide is __ (5) ___.

  1. volatile

  2. mercurial

  3. ephemeral

  4. resilient

  5. imponderable

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A Correct answer
Explanation

Correct; the word means 'changeable'. The value of rupee will keep changing, according to the market forces.