Suppose an economy is experiencing a large and persistent deficit on its balance of payments on current account. Which one of the following is least likely to reduce this deficit?
A fall in the domestic rate of inflation relative to trading partners
A rise in the exchange rate of the domestic currency
A rise in domestic interest rates
A rise in government investment to improve supply-side infrastructure
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.