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JAMB Commerce 2007 Question 38

Question 38

Foreign Trade

The sale of foreign investment and gold reserves can be used to

  1. A.correct adverse balance of trade
  2. B.increase invisible imports
  3. C.correct adverse balance of payments
  4. D.correct a budget deficit.
Show the answer and explanation

Answer: C (correct adverse balance of payments)

Explanation

A balance of payments deficit is settled by running down reserves such as gold and foreign investments.