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Author Question: Assume that there is a balance of payments deficit caused by a high rate of domestic inflation. ... (Read 211 times)

scienceeasy

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on: May 25, 2020

Question 1

Define the current account of the balance of payments.

Question 2

Assume that there is a balance of payments deficit caused by a high rate of domestic inflation. (Choose correct answer in each case.)
a) What effect will a deflationary monetary policy (a reduction in money supply) have on interest rates?
Raise/Lower them.
b) What effect will this have on the financial account?
Cause an inflow/outflow of finance
c) What effect will this have on the money supply?
Increase it/Reduce it
d) What effect will this have on inflation?
Help to reduce it/increase it
e) What effect will a deflationary fiscal policy have on interest rates?
Raise/Lower them
f) What effect will this have on the capital account?
Cause an inflow/outflow of capital
g) What effect will this have on the money supply?
Increase/Reduce it
h) What effect will this have on inflation?
Help to reduce it/increase it
i) Which will be more effective under fixed exchange rates: fiscal or monetary policy?
Fiscal/Monetary
Essential Economics for Business ¦ Sloman, Jones ¦ 5th Edition
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Marked as best answer by scienceeasy on May 25, 2020

Dnite

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Reply #1 on: May 25, 2020
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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scienceeasy

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Reply 2 on: May 25, 2020
Great answer, keep it coming :)

emsimon14

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

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