Economics 9708 · AS & A Level · Balance of payments

Balance of payments — practice question

A country operating a fixed exchange rate has a current account surplus. Which policy would be most suitable for preserving the fixed exchange rate?

  • Aan increase in subsidies given to exporters
  • Bthe imposition of trade barriers on the import of non-essential goods
  • Cthe sale of foreign currencies in the foreign exchange market
  • Dthe use of expansionary monetary policy

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