All other things being equal, which of the following is most likely to lead to a reduction in the size of a country's current account surplus on the balance of payments?
A reduction in the domestic corporation tax rate that increases national savings relative to domestic investment.
A depreciation of the domestic currency alongside a fall in domestic consumer price inflation relative to trading partners.
An increase in the domestic marginal propensity to import accompanied by an expansionary fiscal policy.
A sustained reduction in the level of domestic unit labour costs relative to foreign competitors.
310 exam-style questions on AQA A Level Economics 2.6 The international economy (A-level only), covering 2.6.1 Globalisation, 2.6.2 Trade, 2.6.3 The balance of payments, 2.6.4 Exchange rate systems, and 2.6.5 Economic growth and development. Each one has a worked solution and a mark scheme showing where the marks go.