Question: Which policy is likely to reduce a balance of payments deficit without causing inflation?
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a.a reduction in government spending
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b.a devaluation of the exchange rate
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c.an increase in import tariffs
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d.an increase in indirect taxes
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e.None of the above
Answer: a
 a reduction in government spending b) a devaluation of the exchange rate c) an increase in import tariffs d) an increase in indirect taxes e) None of the above Ans. a) a reduction in government spending
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