Economics 9708 · AS & A Level · Balance of payments

Balance of payments — practice question

Which pair of events is most likely to lead to inflation?

  • Aexchange rate falling; direct taxes falling; money supply falling
  • Bexchange rate falling; direct taxes falling; money supply rising
  • Cexchange rate rising; direct taxes rising; money supply rising
  • Dexchange rate rising; direct taxes rising; money supply falling

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