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Identify the reasons that lead to current account deficits and surpluses.

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Cambridge IGCSE EconomicsInternational trade and globalisation

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Identify the reasons that lead to current account deficits and surpluses

This point belongs to Current account of balance of payments, especially Current account of balance of payments outcomes.
You need to be able to identify the reasons that lead to current account deficits and surpluses.
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IdentifyExplainDiscuss

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Paper 2 structured question: Current account of balance of payments

Paper 2Structured Questions2 marks

Description

Current Account Overview

The current account records a country's transactions with the rest of the world, including trade in goods and services, income, and current transfers.

a
State two reasons for current account deficits.
Your answer
Aim for approximately 2 distinct marking points.
[2]

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Related learning objectives

Understand the elements that make up the current account of the balance of payments, including trade in goods, trade in services, primary income, and secondary income. Be able to calculate deficits and surpluses for the current account and its individual components.
Current account of balance of payments outcomes
Examine the effects of current account deficits and surpluses on key economic indicators such as GDP, employment, inflation, and exchange rates.
Current account of balance of payments outcomes
Explore various policies that can be implemented to achieve stability in the balance of payments and evaluate their potential effectiveness.
Current account of balance of payments outcomes

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