How does devaluation (lowering the exchange rate) help cure current account deficit in the economy?

Q: How can the United States government improve the Balance of Payments in the future from 2018 to…

A:

Q: What are the causes of current account deficit, and how CAD is affecting the economy of Pakistan?

A: Enormous and determined exchange and current account deficit are the absolute most consuming points…

Q: Which policy measure is most likely to be effective in reducing a balance of trade deficit? Pick…

A: This situation is also referred as negative trade balance.

Q: Explain how changes in various economic factors affect a country's current account balance.

A: The current account balance of a country exhibits its transactions with the rest of the world. It is…

Q: What could be the measures to correct disequilibrium in the balance of payments?

A: Depreciation is a term that refers to a rise in the price of a foreign currency or a decrease in the…

Q: Which lessons did the UK economy take from the Beatles effect on the current account in the 1960s?

A: Let it be Of course, this would be number 1. Some people assume there’s a religious element to the…

Q: Why does the trade balance and the current account balance track so closely together over time?

A: Trade is the exchange of goods and services between the buyer and seller. When the buyers and…

Q: If the trade deficit of the United States increases, how is the current account balance affected?

A: Balance of payment refers to the record of the international transactions that the domestic country…

Q: Using examples, demonstrate how exchange rate forecasting is approached?

A: The exchange rate of a country is the price of one currency in terms of another. It is used when the…

Q: Are current account deficits necessarily undesirable? Provide a brief justification.

A: What Is a Current Account Deficit and How Does It Affect You? The current account deficit is a…

Q: What can international business people do to protect their companies from increasing inflation and a…

A: International business have to be very careful in making cost and business expansion decisions,when…

Q: Why is a nation with a current account deficit a borrower at that point in time?

A: Current account includes all those transactions (in monetary terms) which occur due to the movement…

Q: What is the difference between foreign sales revenues and foreign purchase expenses called? A)…

A: In the international market, as the home country makes a record of all the inflow and outflow of…

Q: State reasons (with full explanations) how devaluation and depreciation can cure current account…

A: The current account deficit is the situation of value of import of goods and services is greater…

Q: What is the main role of the IMF? Group of answer choices To ensure a stable exchange rate regime

A: The International Monetary Fund ( in short IMF) attempts to accomplish supportable development and…

Q: Describe two measures that can used by the government to correct a deficit on the current account of…

A: Balance of payment: The balance of payments is a database of all foreign trade and financial…

Q: What are the three components of the Balance of Payments? Explain the relationship between the…

A: The balance of payment (BOP) demonstrates the record of all financial proceedings over a period of…

Q: Why could a current account deficit stimulate an economy? List at least two reasons and explain with…

A: Current account deficit The current account deficit is a situation in the economy of a country…

Q: For a small open economy with production and investment, what are the immediate effects on output…

A: A small open economy (SOE) is an economy of a country that engages in international trade but is…

Q: In the open macroeconomy framework a 'balance of payments deficit' implies that ...

A: An economy is said to be an open economy if it can trade with other countries, i.e., it can import…

Q: What is current account deficit? List down, with detailed explanations, what causes current account…

A: Current Account forms a part of a country's Balance of Payments (BOP). It includes trade in goods…

Q: What are the role of and functions of the IMF?

A: To protect the international market, there are two authorities that are responsible for managing the…

Q: What is balance of visible items in the balance of payments account called?

A: The balance of payments account of any country contains a number of components like balance of…

Q: Which government policy measure would be most likely to reduce a current account deficit and…

A: A current account deficit occurs when a country's export is lower than a country's import.

Q: How is the impact of contractionary monetary policy different in an open economy than in a closed…

A: Contractionary Monetary Policy is refers to decrease in money supply to promote economic growth.…

Q: How do government budget deficits affect the exchange rate and trade balance?

A: The rate at which one country's currency can be exchanged for another country's currency is known as…

Q: difference between balance of trade and balance of payments?

A: Money has been evolved since the ancient times and currently money is used as currency. There are…

Q: How does an increase in government spending affects aggregate demand, investment, and net exports in…

A: In the small open economy, the capital inflow and outflow would have free movement because of…

Q: Write the difference between capital account and current account

A: Concept of balance on current account and balance on capital account are always interrelated to each…

Q: 5   List the types of policies that can lead to a current account deficit

A: Answer to the question is as follows:

Q: What is more important, a country’s current account balance or GDP growth? Why?

A: The concept of the current account balance is narrow as compared to the concept of the GDP. The…