According to the monetary approach to the balance of payments,which of the following economic events would help a country to resolve its balance of trade deficit?
A) An increase in money supply
B) A decrease in money supply
C) A fall of foreign price level
D) A fall of domestic income

Question

Quizplus · Accepted Answer

A decrease in money supply would lead to higher interest rates, attracting foreign capital and improving the balance of payments, helping to resolve a trade deficit.

According to the Monetary Approach to the Balance of Payments,which