Economics (AS & A Level) · May / June 2025 · Paper 12 · Question 29
9708Policies to correct imbalances in the current account of the balance of payments
A country is experiencing a deficit on the current account of its balance of payments. Which policy decision could reduce the deficit?
- Adecrease in income tax rates
- Bincrease in exchange rates
- Cincrease in government spending
- Dincrease in import tariffs
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Correct answer: D. increase in import tariffs
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