Cambridge International (CAIE) · 11 International economic issues (A Level) · 11.1 Policies to correct disequilibrium in the balance of payments

Cambridge International (CAIE) Economics past paper questions: Policies to correct disequilibrium in the balance of payments

Every Cambridge International (CAIE) question on Policies to correct disequilibrium in the balance of payments from 2023 to 2025: 2 essays and 14 multiple choice questions. It covers 11.2 Exchange rates, 10.3 Effectiveness of policy options to meet all macroeconomic objectives, 11.5 Relationship between countries at different levels of development and 9.3 Employment and unemployment. Each question links to its paper, mark scheme and examiner report.

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Subtopics11.2 Exchange rates 210.3 Effectiveness of policy options to meet all macroeconomic objectives 111.5 Relationship between countries at different levels of development 19.3 Employment and unemployment 1

Essay questions on policies to correct disequilibrium in the balance of payments

Multiple choice questions

  1. A-level Paper 3, November 2025, Q27

    What is a protectionist policy a government may use to reduce the deficit on the balance of payments of the current account?

  2. A-level Paper 3, November 2025, Q29

    An economy has a large surplus on the current account of its balance of payments. It revalues its currency. The current account of the balance of payments becomes a greater surplus in the short run. In the long run the surplus becomes…

  3. A-level Paper 3, June 2025, Q27

    Which policy will help to correct a deficit on the current account of the balance of payments?

  4. A-level Paper 3, March 2025, Q22

    The current account on the balance of payments moves into deficit. What is a possible reason for this?

  5. A-level Paper 3, March 2025, Q25

    Which components are included in the current account and financial account of the balance of payments?

  6. A-level Paper 3, November 2024, Q25

    In 2018, the United States (US) government introduced tariffs on a wide range of imports from China. Which type of policy was the US government adopting?

  7. A-level Paper 3, November 2024, Q26

    A US company receives a US$20 million dividend from shares that it owns in a Brazilian company. How would this dividend be shown in the balance of payments of the United States?

  8. A-level Paper 3, November 2024, Q28

    Company X is a multinational company that produces batteries for electric cars. It decides to invest in a new factory in country N. Under which conditions is this investment most likely to improve the current account balance on the balance…

  9. A-level Paper 3, June 2024, Q23

    The inflation rate in a country increased. Which effect would this most likely have on the country’s balance of payments?

  10. A-level Paper 3, June 2024, Q26

    A measure encourages consumers to change spending on imports to spending on domestically produced goods. What does this describe?

  11. A-level Paper 3, March 2024, Q27

    Germany, one of the world’s strongest trading nations, achieved a surplus on current account of the balance of payments in 2021–2022. Which income flow would not have been included in the calculation of Germany’s current account?

  12. A-level Paper 3, June 2023, Q28

    The diagram shows a J curve which indicates that a fall in the exchange rate will worsen the current account position before it starts to improve. What is said to explain this?

  13. A-level Paper 3, March 2023, Q24

    Country X decides to devalue its currency to eliminate a balance of payments deficit. Why might devaluation have a positive effect on its macroeconomy?

  14. A-level Paper 3, March 2023, Q29

    What is an example of an expenditure-switching policy?

Question text is quoted from the question papers, © Cambridge University Press & Assessment (UCLES), for students’ private study. Open the official papers and mark schemes from the links on each question. Examiner insights are written with AI assistance and moderated by Finn.