Economics 9708 · AS & A Level · 6.5

6.5 — practice question

A country’s currency is set by the Central Bank at a fixed rate against US dollars. If currency devaluation cannot be done, which policy could be adopted to cut a current account deficit in the balance of payments?

  • Aa decrease in interest rates
  • Ba decrease in tax rates
  • Ca decrease in tariffs on imports
  • Da decrease in public expenditure

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