# If the Bank of England reduces the money supply to reduce inflation a floating exchange rate will aid the Bank of England in fighting inflation because ? with Answer - Economics Mcqs | TestPrep

> Solved MCQ: If the Bank of England reduces the money supply to reduce inflation a floating exchange rate will aid the Bank of England in fighting inflation because ? Correct Answer: C. as the money supply is decreased the interest rate will increase and the price of UK exports and UK imports will fall.. Verified answer explanation for FPSC, PPSC, MDCAT, NTS, and CSS competitive exam preparation.

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# If the Bank of England reduces the money supply to reduce inflation a floating exchange rate will aid the Bank of England in fighting inflation because ?

Direct Answer & Quick Reference

The correct option is **C. as the money supply is decreased the interest rate will increase and the price of UK exports and UK imports will fall.**.

A. as the money supply is decreased the interest rate will increase and the price of UK exports will rise and the Price of UK imports will fall

B. as the money supply is decreased the interest rate will increase, and the price of UK exports will fall and the price of UK imports will rise

C. as the money supply is decreased the interest rate will increase and the price of UK exports and UK imports will fall. **(Correct Answer)**

D. as the money supply is decreased the interest rate will increase and the price of both UK exports and UK imports will rise

✨ Explain with AI

Verified Key: C. as the money supply is decreased the interest rate will increase and the price of UK exports and UK imports will fall.
Solved by 5,729+ students

Verified against official examination board answer keys and standard curriculum textbooks.

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*Source: https://test-prep.blog/mcq/if-the-bank-of-england-reduces-the-money-supply-to-reduce-inflation-a-floating-e-f3fd6093-ac9f-4e50-b4a6-97a8c1fad521*
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