Balance of payments

Evaluate macroeconomic policies that could be used to reduce a current account deficit. Refer to a country of your choice in your answer.

Case study · The Eurozone economy

Since mid-2015 the euro has appreciated. Assess the likely impact of an appreciation of the euro on the current account of the balance of payments for Eurozone countries.

With reference to the chart on the previous page, explain one likely reason for the change in the UK current account deficit from 2016 to 2021.

Explain the likely impact of the change in China’s terms of trade from 2012 to 2020 on China’s current account. Assume that demand for China’s exports and imports is price elastic.

Explain the likely impact of the change in the exchange rate of the pound shown in the graph from 1st January 2018 to 1st January 2019 on the UK current account of the balance of payments.

Calculate the percentage change in the United States current account deficit on the balance of payments between 1998 and 2006.

Explain the term ‘current account of the balance of payments’.

With reference to the chart above, which one of the following is correct?

Using the chart on page 6, which one of the following may be inferred about the United States balance of payments?