By using exchange controls, a country tries to eliminate a balance of payments deficit by?
Question 1 Report
By using exchange controls, a country tries to eliminate a balance of payments deficit by?
Answer Details
Exchange controls refer to the measures that a country uses to regulate the flow of foreign exchange into and out of its economy. By implementing exchange controls, a country can limit its imports to the value of its exports in order to eliminate a balance of payments deficit. This means that the country will only allow imports that can be paid for with the amount of foreign exchange earned from its exports. This helps to balance the inflow and outflow of foreign exchange, and reduce the pressure on the country's foreign reserves. Therefore, the correct answer is: limiting her imports to its currency value of exports.
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