Economics 9708 · AS & A Level · 6.3

6.3 — practice question

Which of the following is not a valid reason for a government to permit a deficit on the balance of payments current account to continue?

  • AThe balance of payments account must always balance.
  • BForeign direct investment might help to finance the deficit.
  • CThe country may have a larger surplus on the other parts of its balance of payments account.
  • DThe standard of living is increased if the level of cheap food imports is significant.

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