Post Utme Christopher University 2021 Economics Question 12

Practice objective / multiple choice question 12 from the 2021 Post Utme Christopher University Economics examination.

Post Utme Christopher University 2021 Economics Objective / Multiple Choice
Question 12 POST_UTME_CHRISTOPHER_UNIVERSITY • 2021 • ECONOMICS • objective

A country's balance of payments (BOP) account is in equilibrium when its current account (CA) is equal to its capital account (KA). If the country experiences a trade deficit, what is the likely effect on its BOP equilibrium?

Answer Options

Correct Answer A. The trade deficit will lead to a decrease in the country's BOP equilibrium.
B. The trade deficit will lead to an increase in the country's BOP equilibrium.
C. The trade deficit will have no effect on the country's BOP equilibrium.
D. The trade deficit will lead to a decrease in the country's BOP equilibrium, but the exact change cannot be determined.
Correct Answer
A
Correct Option:
The trade deficit will lead to a decrease in the country's BOP equilibrium.

About This Question

This is Post Utme Christopher University 2021 Economics Question 12. It is one of the objective questions from the 2021 Post Utme Christopher University Economics examination.

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