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Economics (AS & A Level) · May / June 2025 · Paper 32 · Question 23

9708Links between macroeconomic problems and their interrelatedness

The central bank of a country decreases interest rates. What are the likely consequences?

  1. Ainternal value of the currency falls; external value of the currency falls
  2. Binternal value of the currency falls; external value of the currency rises
  3. Cinternal value of the currency rises; external value of the currency falls
  4. Dinternal value of the currency rises; external value of the currency rises

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Correct answer: A. internal value of the currency falls; external value of the currency falls

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