4. How to use the three monetary policies and the three fiscal policies to reduce BOP...

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Economics

4. How to use the three monetary policies and the three fiscalpolicies to reduce BOP deficit? Please explain how each policyworks, i.e., how economic entities react to the policy changes sothat the deficit will be reduced.

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A BOP deficit arises when the value of the imports of revenue from goods services inv exceeds the value of the exports Current account deficit reduction policies involve exchange rate devaluation making exports cheaper imports more expensive Reducing domestic demand and import spending eg tight fiscal policy higher taxes See Answer

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4. How to use the three monetary policies and the three fiscal policies to reduce BOP...

80.2K

Verified Solution

Question

Economics

4. How to use the three monetary policies and the three fiscalpolicies to reduce BOP deficit? Please explain how each policyworks, i.e., how economic entities react to the policy changes sothat the deficit will be reduced.

Answer & Explanation Solved by verified expert

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