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.
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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.
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