A country has experienced a current account deficit on the balance of payments for a long time. The government was applying an expenditure-switching policy, but it now intends to move to an expenditure-reducing policy. What might the former policy have been, and what might its new policy be?
- Aold policy: export subsidies; new policy: quotas
- Bold policy: income tax; new policy: interest rate
- Cold policy: quotas; new policy: exchange rate control
- Dold policy: tariffs; new policy: income tax