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Five policy levers

Five policy levers

Flow diagram showing fiscal tightening, monetary tightening, supply-side policy, protectionism and currency depreciation transmitting through imports, exports and capital flows to the balance of payments

Governments can influence the balance of payments using fiscal policy, monetary policy, supply-side policy, protectionism and exchange rate policy. Most policy discussions focus on reducing a current account deficit, since the balance of payments as a whole balances after financial flows and reserve changes are included.

11.1.2 effect of fiscal, monetary, supply-side, protectionist and exchange rate policies on the balance of payments Lesson

  1. Intl A Level
  2. /Economics
  3. /11.1.2 effect of fiscal, monetary, supply-side, protectionist and exchange rate policies on the balance of payments

Step-by-step lessons on CIE Intl A Level Economics 11.1.2 effect of fiscal, monetary, supply-side, protectionist and exchange rate policies on the balance of payments. Each one builds up to exam-style questions.

Lessons