Post Utme Igbinedion University 2017 Economics Question 4

Practice objective / multiple choice question 4 from the 2017 Post Utme Igbinedion University Economics examination.

Post Utme Igbinedion University 2017 Economics Objective / Multiple Choice
Question 4 POST_UTME_IGBINEDION_UNIVERSITY • 2017 • ECONOMICS • objective

Consider a country with a fixed exchange rate regime. If the country's central bank decides to decrease the money supply by 5%, what will be the effect on the balance of payments?

Answer Options

Correct Answer A. The balance of payments will improve due to increased exports.
B. The balance of payments will worsen due to increased imports.
C. The balance of payments will remain unchanged.
D. The balance of payments will improve due to increased imports.
Correct Answer
A
Correct Option:
The balance of payments will improve due to increased exports.

About This Question

This is Post Utme Igbinedion University 2017 Economics Question 4. It is one of the objective questions from the 2017 Post Utme Igbinedion University Economics examination.

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