To correct a balance of payments surplus and inflation a nation requires a:

Question

Quizplus · Accepted Answer

A balance of payments surplus means that a country's exports are exceeding their imports, which can cause inflationary pressure on the domestic economy. To correct this imbalance, the country could devalue their currency to make exports more expensive and imports cheaper. This will stimulate imports and discourage exports, which could help reduce the surplus. Additionally, policies could be implemented to either increase or decrease government spending or to either increase or decrease interest rates depending on the specific circumstances of the economy. Therefore, devaluation and either expansionary or contractionary fiscal and monetary policies are necessary to correct a balance of payments surplus and inflation.

To Correct a Balance of Payments Surplus and Inflation a Nation