Edexcel A-Level Economics A2 4.3.3 1a Components of the Balance of Payments Payments the Current Account the Capital and Topic Practice

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Question 1

[Maximum number: 1]

Between 2022 and 2023 Finland recorded an increase in the capital and financial account deficit of its balance of payments.

Ceteris paribus, which one of the following is the most likely reason for this increase in Finland's capital and financial account deficit?

A

An increase in public sector borrowing and an increase in public sector debt

B

An increase in outflows from the primary income component of Finland's balance of payments

C

A decrease in inward foreign direct investment (FDI) and portfolio investment

D

A decrease in the value to the EU and an increase in the value of imports from the EU

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