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JAMB Economics 1986 Question 42

Question 42

Balance of Payments and Exchange Rates

Balance of payments deficit in Nigeria CANNOT be solved by

  1. A.importing more goods and services
  2. B.devaluation of the currency
  3. C.imposing import duties
  4. D.imposing import bans on some commodities.
Show the answer and explanation

Answer: A (importing more goods and services)

Explanation

A deficit means more is paid out than received; importing more increases payments and makes the deficit worse.