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Discuss the alternative policies a government may use to improve a deficit in the Balance of Payments (BOP).
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| Submitted: Wed Dec 03 2003
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Discuss the alternative policies a government may use to improve a deficit in the Balance of Payments (BOP) Edward Cohen There are many ways a government can improve a deficit of the BOP. First we must define the key terms. A deficit is the falling short of revenue as compared with expenditure; the amount of this deficiency; the amount required to make assets balance liabilities. The Balance of payments is a record or overall statement of a country's economic transactions with the rest of the world, usually over a year. Now it is clear what the question means it is important to understand what causes a deficit in the BOP. There is often a tendency for UK consumers to buy foreign output goods leading to an increase in the amount of imports coming into the county. Often the domestic market cannot cope with the demand so imports are made to satisfy demand. Some UK...
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