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WAEC Economics 2006 Question 47

Question 47

Balance of Payments and Exchange Rates

In an attempt to correct a deficit balance of payment, a country may decide to increase

  1. A.domestic production
  2. B.imports
  3. C.domestic expenditure
  4. D.tax on infant industries.
Show the answer and explanation

Answer: A (domestic production)

Explanation

Producing more at home reduces imports and raises exports, which reduces the deficit.