e Materials-201718- The credit side of the The credit side of the balance of pay

Question

e Materials-201718- The credit side of the The credit side of the balance of payments constitutes the demand forsterling, whereas the debit side constitutes the supply ot sterling QUESTION 8 Which one of the following would help to prevent an appreciation of sterling resulting from an excess demand for sterling? Building up reserves. An increase in interest rates. A reduction in government expenditure and an increase in taxation, but with no change in interest rates. The Bank of England purchasing sterling on the foreign exchange market. OA decrease in the supply of money QUESTION 9 Click Save and Submit to save and submit. Click Save All Answers to save all answers. Save All

Explanation / Answer

now here it is stated that the current demand for sterling is high thus the currency is appreciated, now if we implement any strategy from 2nd point to last point, the demand for sterling will rise urther or in case 3 it will stay constant ,

so it is only by building reserves that we can tackle this.

so answer is A

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.