Multiple Choice (1 Viewer)

[michaeljennings]

How would the effect of a rise in interest rates on foreign loans initially affect the Balance of Payments
a) Capital credits would decrease
b) Capital debits would increase
c) Income credits would increase
d) Income debits would decrease

Is it C?

 

[Bobbo1]

pretty tricky, and only guessing here, but I would think that income debits would INCREASE, therefore to offset this in the capital account: capital credits would decrease

anyway, keep the multiple choice questions coming