WAEC Commerce 2017 Objective — Question 50

Question 50 of 50 from the West African Examinations Council (WAEC) Commerce 2017 Objective paper, with the correct answer and a full explanation.

50. Balance of payment deficits may be caused by

A. A. revaluation of currency
B. B. sales of foreign reserves
C. C. unrestricted exports
D. D. unrestricted importsCorrect

Explanation

When currency is reevaluated, the domestic currency becomes more pricey. Thus, it may result to decrease in export and this will lead to deficit in balance of payment. (Unrestricted imports similarly drain foreign reserves, causing balance of payment deficits.)

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