A-LevelEconomicsInternational economic issues9708/12 · Feb/Mar 2023 · Q301 Mark

A government raises interest rates to improve the current account of the balance of payments. What might reduce the effectiveness of this policy?

Afall in domestic growth

Bconsumer pessimism

Cincreased domestic saving

Dprice-elastic demand for exports

✓ Correct answer

D: price-elastic demand for exports

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Topic: International economic issues, A-Level Economics (syllabus 9708). Multiple choice, 1 mark.
Source: A-Level Economics, Feb/Mar 2023 Paper 1 Variant 2, question 30.

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