Question #16229
How can a country reduce its current account deficit?
Expert's answer
By using Expenditure switching policies
These are policies that a government may use to switch consumers' expenditure away from imports and towards home produced goods. There are two main types - using import controls like tariffs and devaluing the exchange rate.
A devaluation of the exchange rate
Expenditure reducing policies
These are policies that a government may use to switch consumers' expenditure away from imports and towards home produced goods. There are two main types - using import controls like tariffs and devaluing the exchange rate.
A devaluation of the exchange rate
Expenditure reducing policies
