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The following represents the inflation rates of foreign country X for the past 5 years: Year 1: 35% Year 2: 20% Year 3: 25% Year

The following represents the inflation rates of foreign country X for the past 5 years:

Year 1: 35%

Year 2: 20%

Year 3: 25%

Year 4: 30%

Year 5: 15%

Which statement is correct about the selection of a functional currency for country X at the end of year 5.

a.

Country X is highly inflationary; the US dollar must be used

b.

Country X is not highly inflationary; the US dollar must be used

c.

Country X is not highly inflationary; either the US dollar or the foreign currency may be used depending on the factors to determine the functional currency

d.

Country X is highly inflationary; the foreign currency must be used

e.

Country X is not highly inflationary; the foreign currency must be used

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