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Balance of Payments

Does a BoP Deficit cause problems?. It depends on the size and nature of the deficit!The larger the deficit, over a longer period of time the greater the problems will be!If it's cheap imports

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Balance of Payments

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    1. Balance of Payments Surplus & Deficits.

    2. Does a BoP Deficit cause problems? It depends on the size and nature of the deficit! The larger the deficit, over a longer period of time the greater the problems will be! If its cheap imports & an increase in M??? If its the UK not being competitive and there is a fall in X???

    3. Short run V long run deficit! In the Short run. A deficit might mean that UK households have a better standard of living In the Long run A deficit might cause UK businesses to suffer, rising unemployment . and falling standards of living!

    4. Curing BoP deficit Deflation Direct controls Devaluation

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