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3 marksBalance of Payments and Exchange Rates

CAPE Economics Unit 2 · 2016 · Paper 2 · Question 5(a)

Question 5 covers international trade, balance of payments, and correction policies.

Explain what is meant by a 'current account deficit'.

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Other parts of this question

  1. 5(b)Explain TWO ways in which Caribbean countries could improve performance on their current account.[6 marks]
  2. 5(c)(i)Outline TWO ways in which expenditure-switching policies may be used to correct balance of payments disequilibrium.[4 marks]
  3. 5(c)(ii)Outline TWO ways in which expenditure-reducing policies may be used to correct balance of payments disequilibrium.[4 marks]
  4. 5(d)Discuss ONE positive and ONE negative effect of a current account deficit on a country.[8 marks]

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