Current Account Surplus Flashcards
1
Q
Why might govement want to tackle current account surplus ?
A
Sign of weak domestic demand
Demand pull inflation
Germanys case to help out other members of trading block
2
Q
Reflation
A
Expansionary macroeconomic policy
Will increase national income and demand for imports
3
Q
Revaluation
A
Appreciation of country’s exchange rate
4
Q
Removal of direct controls
A
Removing tarrifs increases foreign goods ability to compete on price
