A country has experienced a persistent current account deficit in the balance of payments. Its government had been following an expenditure switching policy, but now plans to move to an expenditure reducing policy. What might the former policy have been, and what would the new policy be?
- Aold: export subsidies — new: quotas
- Bold: income tax — new: interest rate
- Cold: quotas — new: exchange rate control
- Dold: tariffs — new: income tax