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Economics (AS & A Level) · May / June 2026 · Paper 32 · Question 22

9708Monetary policy

Other things being equal, what is likely to result from a reduction in interest rates in a country?

  1. Aan appreciation of the country's currency
  2. Ba decrease in consumption
  3. Ca decrease in investment
  4. Dan outflow of short-term capital

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Correct answer: D. an outflow of short-term capital

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