Post Utme Unilorin 2025 Economics Question 14

Practice objective / multiple choice question 14 from the 2025 Post Utme Unilorin Economics examination.

Post Utme Unilorin 2025 Economics Objective / Multiple Choice
Question 14 POST_UTME_UNILORIN • 2025 • ECONOMICS • objective

A country has a trade deficit of $100 million and a current account deficit of $200 million. U\sing the balance of payments identity, explain how these deficits affect the country's exchange rate.

Answer Options

A. The trade deficit and current account deficit lead to an appreciation of the exchange rate.
Correct Answer B. The trade deficit and current account deficit lead to a depreciation of the exchange rate.
C. The trade deficit and current account deficit have no effect on the exchange rate.
D. The trade deficit and current account deficit lead to a stable exchange rate.
Correct Answer
B
Correct Option:
The trade deficit and current account deficit lead to a depreciation of the exchange rate.

About This Question

This is Post Utme Unilorin 2025 Economics Question 14. It is one of the objective questions from the 2025 Post Utme Unilorin Economics examination.

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