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Economics (AS & A Level) · Oct / Nov 2024 · Paper 31 · Question 25

9708Policies to correct disequilibrium in the balance of payments

Which policy to reduce a current account deficit on the balance of payments could be described as an expenditure-switching policy?

  1. Aa decrease in government spending
  2. Ba decrease in the exchange rate of the country's currency
  3. Can increase in domestic income taxes
  4. Dan increase in domestic interest rates

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Correct answer: B. a decrease in the exchange rate of the country's currency

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