

MCQOPTIONS
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1. |
If the Bank of England reduces the money supply to reduce inflation a floating exchange rate will aid the Bank of England in fighting inflation because ? |
A. | as the money supply is decreased the interest rate will increase and the price of UK exports will rise and the Price of UK imports will fall |
B. | as the money supply is decreased the interest rate will increase, and the price of UK exports will fall and the price of UK imports will rise |
C. | as the money supply is decreased the interest rate will increase and the price of UK exports and UK imports will fall. |
D. | as the money supply is decreased the interest rate will increase and the price of both UK exports and UK imports will rise |
Answer» D. as the money supply is decreased the interest rate will increase and the price of both UK exports and UK imports will rise | |