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QUESTION 30

A balance of payment deficit can be corrected by:

A. Reduction in import tax rates.
B. Removal of import quotas.
C. A currency devaluation.
D. A currency revaluation.

Sagot :

GinnyAnsweridn

Final answer:

A balance of payment deficit can be corrected by a currency devaluation, which makes exports more attractive and imports more expensive, helping reduce the deficit.


Explanation:

A balance of payment deficit can be corrected by a currency devaluation. When a country's currency is devalued, it becomes cheaper relative to other currencies, making exports more attractive and imports more expensive, which can help reduce the balance of payments deficit.

For example, if a country devalues its currency, let's say the dollar, in comparison to the euro, it means that one dollar is now worth fewer euros. As a result, products priced in dollars become cheaper for those paying in euros, potentially increasing exports.

Currency devaluation can be a strategic tool used by countries to address trade imbalances and rectify balance of payment deficits.


Learn more about currency devaluation, trade imbalance, balance of payments deficit here:

https://brainly.com/question/51048438


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