Economics 2281 · O Level · Current account of balance of payments
Current account of balance of payments — practice question
The Canadian government has put in place several policy measures aimed at encouraging more women to join the labour force. Canada’s labour force has shrunk because its population has become older. The number of workers and the amount they produce are affected by changes in the country’s foreign exchange rate and by consumer expenditure. In 2018, the Canadian dollar lost value while Canadian consumer expenditure rose.
(a)[2]
Define the term labour force.
(b)[4]
Explain two reasons for an ageing population.
(c)[6]
Analyse how a depreciation in a country’s foreign exchange rate could cut a deficit on the current account of its balance of payments.
(d)[8]
Discuss whether an economy would benefit from higher consumer expenditure.
Worked solution & mark scheme
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