a)Why should every government be concern with inflationary pressure?

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A fall in export receipts will cause a fall in the demand for the country’s currency. A rise in import payments will lead to an increase in the supply of currency. As a result, the exchange rate will depreciate. This would mean that the fall in the internal value of the currency will lead to a fall in the external value of the currency...
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As a result, the exchange rate will depreciate. This would mean that the fall in the internal value of the currency will lead to a fall in the external value of the currency. The continuous fall in the exchange rate may lead to a loss of confidence in the domestic currency by foreign investors...
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