CIMA Fundamentals of Business Economics BA1 Question # 6 Topic 1 Discussion
BA1 Exam Topic 1 Question 6 Discussion:
Question #: 6
Topic #: 1
Following a 10% reduction in the value of its currency, the volume of imports into the country falls by 10%, whilst the volume of exports rises by 15%.
Which of the following effects will occur?
A.
Balance of payments will improve
B.
Balance of payments will deteriorate
C.
Terms of trade will improve
D.
The central bank will be forced to borrow more foreign exchange to cover the shortfall
Chosen Answer:
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