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'We always negotiate in bolivares, but suppliers have to take into account as well the dollar rate in order to anticipate potential devaluations in the
"'We always negotiate in bolivares, but suppliers have to take into account as well the dollar rate in order to anticipate potential devaluations in the exchange rate. For instance, if a dollar equals 202,000 bolivares today, suppliers will factor in an exchange rate of 310,000 for your bill, anticipating the future rate because you are not paying them on the spot.'"
Under which theory, learned in GBE, does such behaviour raise the inflation rate?
- The Quantity Equation.
- The Phillips Curve.
- Okun's Law.
- The Zero Lower Bound.
- The Fisher Equation.
- The AE model
Need guidance with the answer but also explanation of relationship with theory for further study
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