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WAEC Commerce 2017 Question 50

Question 50

Foreign Trade

Balance of payment deficits may be caused by

  1. A.revaluation of currency.
  2. B.sales of foreign reserves.
  3. C.unrestricted exports.
  4. D.unrestricted imports.
Show the answer and explanation

Answer: D (unrestricted imports.)

Explanation

When imports are not controlled, payments abroad can exceed earnings, causing a deficit.