Economics 9708 · AS & A Level · Balance of payments

Balance of payments — practice question

Which mix of changes is most likely, in the short run, to cause a decrease in a country’s inflation rate? (exchange rate; indirect taxes)

  • Aexchange rate higher; indirect taxes higher
  • Bexchange rate higher; indirect taxes lower
  • Cexchange rate lower; indirect taxes higher
  • Dexchange rate lower; indirect taxes lower

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