A-LevelEconomicsGovernment macroeconomic intervention9708/12 · May/June 2016 · Q301 Mark
Which policy, adopted by a government with the intention of reducing the rate of inflation, might cause a greater 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
✓ Correct answer
A: higher foreign exchange rates for its currency
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