Other things equal, a surplus nation can reduce its payments imbalance by
A) applying tariffs and trade restrictions on imports.
B) devaluing its national currency.
C) increasing its labor productivity.
D) setting higher interest rates than its trading partners.

Question

Quizplus · Accepted Answer

Devaluing its national currency makes its exports cheaper and imports more expensive, which can help reduce a surplus by increasing exports and decreasing imports.

Other Things Equal, a Surplus Nation Can Reduce Its Payments