Economics (AS & A Level) · Feb / March 2025 · Paper 12 · Question 28

A country experiences a rising trade deficit and a current account surplus at the same time. Which combination of events might explain this?

1. AEvent 1: a global recession resulting in decreased prices of commodities; Event 2: Gross National Income (GNI) rises faster than Gross Domestic Product (GDP)
2. BEvent 1: increased subsidies for exporters; Event 2: increased donations received from abroad to combat a humanitarian crisis
3. CEvent 1: removal of restrictions on imports; Event 2: removal of restrictions on the remittance of profits of foreign-owned producers
4. DEvent 1: rising imports of machinery to help raise exports in the future; Event 2: increased secondary income from workers' remittances from abroad

As printed in the paper