CAIE A-Level Economics 6.5.1 Current Account Stability Objective

Practise explaining why a government may target current-account stability and, from the available evidence, why reducing an excessive surplus can ease domestic inflation pressure.

Exam points

explain how reducing a large current-account surplus can lower net-export demand and inflationary pressure

[Maximum number: 1]

Why may a government seek to reduce a current account surplus on the balance of payments?

to lower inflation

to lower unemployment

to raise the economic growth rate

to raise the exchange rate

All question bank results loaded

6.5.1—Current account stability objective question 1