A-LevelEconomicsGovernment macroeconomic intervention9708/12 · Feb/Mar 2016 · Q291 Mark
Possible policies a government might use to reduce a deficit on the current account of the balance of payments include devaluation, government spending cuts, interest rate rises and tariffs on imports. Which two policies would be classified as expenditure-switching?
Adevaluation and government spending cuts
Bgovernment spending cuts and interest rate rises
Cinterest rate rises and tariffs on imports
Dtariffs on imports and devaluation
✓ Correct answer
D: tariffs on imports and devaluation
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