Economics (AS & A Level) · Oct / Nov 2023 · Paper 12 · Question 25
9708Current account of the balance of payments
A country's current account deficit is larger this year than last. What is the most likely reason for this increase?
- ADemand for domestically produced goods has risen.
- BDomestic inflation has risen faster than the inflation of its major trading partners.
- CDomestic unemployment has risen.
- DThe exchange rate has depreciated.
As printed in the paper
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Correct answer: B. Domestic inflation has risen faster than the inflation of its major trading partners.
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