Question

Discuss whether a reduction in the rate of interest
will reduce a current account surplus on a country’s balance of payments.

Answer 1

Answer:

However, an increase in interest rates can lead to an appreciation of the currency as demand for the currency increases. So this again increases the price of exports as the value of the currency increases. ... The impact of an increase in interest rates on the current account balance of payments is uncertain

Answer 2

Answer:

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Explanation:

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