What could a government do to correct the current account deficit?
- Reduce the repayment of loans
- Reduce the volume of exports
- Reduce the deficit on the balance of trade
- Reduce the surplus on the capital account
Explanation
Reduce the deficit on the balance of trade
The government may raise tariffs on imported goods or introduce quotas. Both measures will lead to a reduction in imports and thus an improvement in the current account balance.
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