International economics

Table of Contents

1. Topic pack - International economics - introduction
2. Section 3.1 International trade (notes)
3. Section 3.1 International trade (questions)
4. Section 3.1 International trade - simulations and activities
5. Section 3.2 Exchange rates (notes)
6. Section 3.2 Exchange rates - questions
7. Section 3.2 Exchange rates - simulations and activities
8. Section 3.3 Balance of payments - notes
9. Section 3.3 Balance of payments - questions
   1. Current account - short answer
   2. The balance of payments - self-test questions
   3. Balance of payments - calculation (1)
   4. Balance of payments - calculation (2)
   5. Methods of correction - short answer
   6. Balance of payments - essay
   7. Can the beast be tamed? America's monster trade gap
10. Section 3.4 Economic integration - notes
11. Section 3.4 Economic integration - questions
12. Section 3.5 Terms of trade - notes
13. Section 3.5 Terms of trade - questions
14. Print View

Methods of correction of a current account deficit/surplus - short answer

Discussion questions - Go on have a good chat!

Question 1

Explain two ways the government might attempt to reduce a deficit on the current account of the balance of payments.

Question 2

To what extent could the government afford to ignore a deficit on the current account of the balance of payments?

Question 3

Under a floating exchange rate system, a depreciation of the currency would normally be expected to eliminate a deficit on the current account of the balance of payments. Explain why this might not always happen.

Question 4

Explain how, in theory, a floating exchange rate system automatically corrects a balance of payments deficit without the need for government intervention.

Question 5

Evaluate how successful, in practice, a freely floating exchange rate system is likely to be in correcting a balance of payments deficit.

Question 6

Analyse how government policies aimed at reducing a balance of payments deficit might conflict with other goals of economic policy.