A-LevelEconomicsThe macroeconomy9708/12 · Oct/Nov 2017 · Q41 Mark

What is most likely to severely affect the ability of money to act as a medium of exchange?

Adevaluation of a country's rate of exchange for foreign currency

Ban increase in the money supply

Cvery high rate of inflation

Dvery high rate of interest

✓ Correct answer

C: very high rate of inflation

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Topic: The macroeconomy, A-Level Economics (syllabus 9708). Multiple choice, 1 mark.
Source: A-Level Economics, Oct/Nov 2017 Paper 1 Variant 2, question 4.

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