Answer to Question #124146 in Macroeconomics for Starboy

Question

If interest rates increase, it has a negative effect on the financial account.
B. If the repo rate increases, it leads to a surplus on the BoP.
C. The SARB can sterilise capital inflows by buying bonds in the capital market.
D. If government spending increases, it leads to a surplus on the current account.

Answer 1

A. If interest rates increase, it has a negative effect on the financial account - true.

B. If the repo rate increases, it leads to a surplus on the BoP - false.

C. The SARB can sterilise capital inflows by buying bonds in the capital market - false.

D. If government spending increases, it leads to a surplus on the current account - false.