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WAEC Economics 2000 Question 48

Question 48

Balance of Payments and Exchange Rates

Balance of payments deficit implies that a country is

  1. A.importing more than she is exporting
  2. B.consuming less than she is producing
  3. C.living below her means
  4. D.more productive than others.
Show the answer and explanation

Answer: A (importing more than she is exporting)

Explanation

A deficit means payments to other countries (for imports) are more than receipts from them (for exports).