Economics 9708 · AS & A Level · 6.3

6.3 — practice question

A government has low foreign currency reserves. At what point would it be most likely to regard a deficit on current account as a serious problem?

  • Awhen the country is experiencing a period of high, sustained growth
  • Bwhen the deficit alternates regularly with a surplus
  • Cwhen the deficit exceeds the sum of errors and omissions in the balance of payments account
  • Dwhen the level of international confidence in the country is low

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