Post Utme Elizade University 2021 Economics Question 13

Practice objective / multiple choice question 13 from the 2021 Post Utme Elizade University Economics examination.

Post Utme Elizade University 2021 Economics Objective / Multiple Choice
Question 13 POST_UTME_ELIZADE_UNIVERSITY • 2021 • ECONOMICS • objective

A country's balance of payments is in deficit due to a large trade deficit. The government decides to implement a policy to reduce the trade deficit. U\sing the concept of the balance of payments, explain how the policy affects the country's exchange rate.

Answer Options

A. The policy increases the exchange rate
Correct Answer B. The policy decreases the exchange rate
C. The policy has no effect on the exchange rate
D. The policy increases the exchange rate in the short run but decreases it in the long run
Correct Answer
B
Correct Option:
The policy decreases the exchange rate

About This Question

This is Post Utme Elizade University 2021 Economics Question 13. It is one of the objective questions from the 2021 Post Utme Elizade University Economics examination.

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