Practise judging how fiscal, monetary, supply-side, protectionist and exchange-rate policies affect current-account deficits.
The government of Lesotho introduces a programme to promote exports and to encourage firms to expand by subsidising local entrepreneurs.
What effect is this likely to have on incomes, the balance of payments current account deficit and government expenditure in Lesotho?
incomes
balance of
payments current
account deficit
government
expenditure
fall
reduce
rise
fall
uncertain
rise
rise
reduce
no change
rise
uncertain
rise
D