Post Utme Mountain Top University 2023 Economics Question 28

Practice objective / multiple choice question 28 from the 2023 Post Utme Mountain Top University Economics examination.

Post Utme Mountain Top University 2023 Economics Objective / Multiple Choice
Question 28 POST_UTME_MOUNTAIN_TOP_UNIVERSITY • 2023 • ECONOMICS • objective

A country is experiencing a trade deficit due to a large imbalance in its trade with a major trading partner. The country's exports are valued at $100 million, while its imports are valued at $150 million. What is the balance of payments effect of this trade deficit?

Answer Options

Correct Answer A. The trade deficit will lead to a decrease in the country's foreign exchange reserves.
B. The trade deficit will lead to an increase in the country's foreign exchange reserves.
C. The trade deficit will have no effect on the country's foreign exchange reserves.
D. The trade deficit will lead to a decrease in the country's GDP.
Correct Answer
A
Correct Option:
The trade deficit will lead to a decrease in the country's foreign exchange reserves.

About This Question

This is Post Utme Mountain Top University 2023 Economics Question 28. It is one of the objective questions from the 2023 Post Utme Mountain Top University Economics examination.

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