What could a government do to correct the current account deficit ?
Correct answer: A. Reduce the deficit on the balance of trade
- A. Reduce the deficit on the balance of trade
- B. Reduce the repayment of loans
- C. Reduce the surplus on the capital account
- D. Reduce the volume of exports
Explanation
The current account includes the balance of trade, so reducing a trade deficit directly improves the current account position. Reducing exports would normally worsen the trade balance, and capital-account changes do not directly correct the current account deficit.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? [email protected]
About Macroeconomics
The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
Practise Macroeconomics
1,499 free Macroeconomics MCQs from Economics, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Discussion
Stuck on an option, or know a faster way to get there? Ask or explain it here.
No comments yet. Be the first to explain this one.
Exams that ask Economics questions like this
Economics is on 3 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Macroeconomics questions
When stock market is falling it is_______________?
The govt. can control inflation by______________?
Which property the paper money does not process ?
'Forex' stands for ?
The sum of total income received for the services of labor, land or capital in a country is called?
Which of the following would increase national income ?