Which TWO of the Following Policy Actions Might Be Available

question 10

Multiple Choice

Which TWO of the following policy actions might be available to a government that wishes to reduce a deficit in the balance of payments? (Choose two.)

• A) Devaluate the exchange rate in order to increase exports.
• B) Increase the money supply in order to stimulate domestic consumption.
• C) Appreciate the exchange rate in order to reduce imports.
• D) Reduce the interest rate in order to stimulate investment.
• E) Introduce tariffs on imported goods in order to favour domestic producers.

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