Question

To reduce deficit in the balance of payments of a country, what requirement(s) is/are needed?
Options:

• A. Increase its exports
• B. Decrease its imports
• C. Devaluate its currency
• D. All of these

Hint:

A combination of increasing exports, reducing imports, and currency devaluation can help reduce a balance of payments deficit.

Answer 1

The Correct Option is D

To reduce the deficit in the balance of payments, a country can take several actions, including increasing exports, decreasing imports, and devaluating its currency to make exports more competitive.