A government wishes to reduce a persistent deficit on the current account of the balance of payments. Which of the following policy combinations contains only expenditure-switching policies?
A depreciation of the domestic currency and an increase in tariffs on imported goods.
An increase in the central bank's policy interest rate and a reduction in government spending.
An increase in the standard rate of personal income tax and a depreciation of the domestic currency.
An increase in tariffs on imported goods and a reduction in government spending.
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.