Economics 9708 · AS & A Level · Monetary policy

Monetary policy — practice question

Which policy, introduced by a government with the aim of lowering the inflation rate, could result in a larger deficit on the balance of payments?

  • Ahigher foreign exchange rates for its currency
  • Bhigher interest rates for domestic customers
  • Chigher subsidies to domestic producers
  • Dhigher tax rates on consumer incomes

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