What this practice covers
These questions are drawn from past CIE 9708 papers and filtered to policies to correct disequilibrium in the balance of payments. You answer, you find out immediately whether you were right, and you get the reasoning for the correct option and for each distractor. Wrong answers go to a mistakes locker so you can come back to exactly those.
Practice is free. You need an account only so your progress and your mistakes are still there next time.
Start practising Paper 3 MCQs →
What examiners see students get wrong here
These are the errors that cost marks on policies to correct disequilibrium in the balance of payments, taken from our own topic notes. Read them before you practise and you will recognise the traps in the questions.
- Saying the balance of payments is in deficit without specifying the current account.
- Asserting a depreciation improves the current account without stating Marshall-Lerner.
- Getting the condition wrong, for example requiring each elasticity to exceed 1 rather than their sum.
- Describing the J-curve without explaining why short run elasticities are low.
- Forgetting that expenditure reducing policies work through income and therefore cost employment.
- Treating a current account deficit as automatically bad, without asking what it funded and how it is financed.
- Forgetting that a current account deficit is matched by a financial account surplus.
Revise it first
If any of the above is unfamiliar, work through the notes before practising: Policies to Correct Disequilibrium in the Balance of Payments revision notes.