A-LevelEconomicsInternational economic issues9708/12 · Oct/Nov 2009 · Q291 Mark

A government with a floating exchange rate wishes to encourage a rise in the international value of its currency. What should it do?

ALower the level of domestic interest rates.

BReduce the amount of foreign currency available to its citizens.

CReduce subsidies to its exporters.

DRemove trade barriers on imports.

✓ Correct answer

B: Reduce the amount of foreign currency available to its citizens.

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Topic: International economic issues, A-Level Economics (syllabus 9708). Multiple choice, 1 mark.
Source: A-Level Economics, Oct/Nov 2009 Paper 1 Variant 2, question 29.

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