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- Subject
- The Balance of Paymentseconomics-mcqs › the-balance-of-payments
- Published
- 27 May 2019
- Last updated
- 28 May 2026
What strategy should a country adopt to lower its current account deficit?
Multiple choice question for The Balance of Payments. Select an option, then review the explanation below.
Explanation
To reduce a current account deficit, a country needs to lower its domestic consumption, which often leads to fewer imports. Increasing government spending or cutting taxes may increase consumption, while boosting private investment does not directly reduce the deficit. Therefore, decreasing domestic consumption is the most effective approach.
More The Balance of Payments MCQs
Practice related questions from the same subject.
- 1.Which of the following statements about the balance of payments is accurate?
- 2.What term describes the difference between a nation's exports and imports of goods?
- 3.What is required to reconcile discrepancies in the balance of payments accounts?
- 4.What does the balance of trade specifically measure?
- 5.Which economic pattern is commonly observed in countries during the initial phases of rapid economic growth?