Economics (AS & A Level) · Oct / Nov 2024 · Paper 13 · Question 25

What is not a valid explanation of why a government might allow a deficit on the balance of payments current account to continue?

1. AThe balance of payments account must always balance.
2. BForeign direct investment might help to finance the deficit.
3. CThe country may have a larger surplus on the other parts of its balance of payments account.
4. DThe standard of living is increased if the level of cheap food imports is significant.

As printed in the paper