7. Under which of the following conditions are uctuations in exchange rates likely to be less severe? Indicate Yes or No for each option, and provide a short reason for your answer. (10 Marks) 7.1) The demand for imports and exports is highly price inelastic. 7.2) Speculators believe that uctuations in exchange rates are likely to be considerable. 7.3) Governments pursue a policy of setting interest rates in accordance with international interest rate. 7.4) Large amounts of the country's currency are held abroad. 75) There are many substitutes abroad for the country's exports