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.
