Economics 9708 · AS & A Level · 6.5

6.5 — practice question

The government of Lesotho launches a programme aimed at boosting exports and helping firms to grow by subsidising local entrepreneurs. What impact is this likely to have on incomes, the balance of payments current account deficit and government expenditure in Lesotho?

  • Aincomes: fall; balance of payments current account deficit: reduce; government expenditure: rise
  • Bincomes: fall; balance of payments current account deficit: uncertain; government expenditure: rise
  • Cincomes: rise; balance of payments current account deficit: reduce; government expenditure: no change
  • Dincomes: rise; balance of payments current account deficit: uncertain; government expenditure: rise

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