Background Information - India . Over the past two years, the interest rate paid for savings (non- transaction) accounts deposits in India has fallen. This has caused Source - Reserve Bank of India, various news outlets people to move their money from savings (non-transaction) to checking (demand deposit) accounts. As a result of this move, all else April 8, 2022 Currency 30.77 trillion INR April 8, 2022 Demand (Transaction) Deposits 21.66 trillion INR equal, M1 has [increased/decreased/remained the same/changed April 8, 2022 Savings (Non-Demand or Non-Transaction) 155.16 trillion INR ambiguously], and M2 has [increased/decreased/ remained the Deposits same/changed ambiguously ]. 2021 Real GDP 147,540 billion INR Similar to the US Federal Reserve ONRRP, the Reserve Bank of India 2020 Real GDP 135,130 billion INR (the central bank for India) has a Reverse Repo Rate. Like with the US, the Reverse Repo Rate acts as a for interest rates in India. 2021 Population 1.39 billion people Raising this rate is expected to put pressure on inflation. 2020 Population 1.38 billion people Ceiling; upward Marginal Propensity to Consume 0.63 Ceiling; downward 2021 Q4 Exports 12.88 trillion INR 2021 Q4 Imports 15.26 trillion INR Floor; upward The currency of India is the Indian Rupee, abbreviated INR, and symbolized as ?.) Floor; downward The Reserve Bank of India has been selling government securities (government debt) throughout the month of April. This is an example of and is expected to put pressure on interest rates. Expansionary fiscal policy; upward Expansionary fiscal policy; downward Contractionary fiscal policy; upward Contractionary fiscal policy; downward Expansionary monetary policy; upward Expansionary monetary policy; downward Contractionary monetary policy; upward . Contractionary monetary policy; downward . What was India's net capital inflow in the fourth quarter of 2021? The rupee has been depreciating against the dirham (the currency of the United Arab Emirates) in recent weeks. Which of the following could possibly explain this? Inflation in India is almost 7%, whereas inflation in the United Arab Emirates is only 2.5%. India and the United Arab Emirates have signed a new trade deal that substantially reduces the tariff on Indian exports to the United Arab Emirates. The baseline interest rate in India is 4%, whereas it is 1.75% in the United Arab Emirates. The removal of COVID-19 restrictions on air travel has led to a surge in tourism from the United Arab Emirates to India