Economics (AS & A Level) · May / June 2023 · Paper 13 · Question 27
9708Policies to correct imbalances in the current account of the balance of payments
A country had a current account surplus of $141bn. Which policy may its government implement to reduce this surplus in the short run?
- Aa decrease in direct taxes
- Ba decrease in regulations to encourage more foreign firms to locate in this country
- Can increase of import duties
- Dan increase in interest rates
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Correct answer: A. a decrease in direct taxes
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