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WAEC Economics 2025 Question 5

Question 5

Balance of Payments and Exchange Rates

A long-term adverse balance of payments can be corrected by

  1. A.revaluing the domestic currency.
  2. B.reducing or removing export duties.
  3. C.receiving gifts from other countries.
  4. D.using up foreign currency reserves.
Show the answer and explanation

Answer: B (reducing or removing export duties.)

Explanation

Cheaper exports earn more foreign exchange over time; gifts and reserves are only temporary.