A-LevelEconomicsInternational economic issues9708/12 · May/June 2016 · Q221 Mark

In July 2013, orders for durable US manufactured goods from computers to aircraft fell 7.3%, the biggest fall for a year. What might explain this change in trade and how would it have affected the US balance of payments?

Aan expansion in domestic production, increased outflow in the current account

Ban expansion in foreign markets, reduced inflow in the financial account

Crecession in domestic production, increased outflow in the financial account

Drecession in foreign markets, reduced inflow in the current account

✓ Correct answer

D: recession in foreign markets, reduced inflow in the current account

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Topic: International economic issues, A-Level Economics (syllabus 9708). Multiple choice, 1 mark.
Source: A-Level Economics, May/June 2016 Paper 1 Variant 2, question 22.

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