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Economics (AS & A Level) · May / June 2022 · Paper 11 · Question 26

9708Exchange rates

What would be the best policy to increase the value of a currency?

  1. AImpose tariffs on imported goods with price-inelastic demand.
  2. BIncrease interest rates.
  3. CReduce income tax.
  4. DSell the currency on the foreign exchange markets.

As printed in the paper

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Correct answer: B. Increase interest rates.

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