The essay type of comparing dual policies and their effectiveness in reducing the current account deficit is very common and popular in exams. These are some examples of essays that have came out in the past.
[M24/22] Assess whether contractionary fiscal policy is likely to be the best way to reduce a current account deficit on the balance of payments. [12]
[S23/22] Assess whether protectionism is the best way to correct a deficit in the current account of the balance of payments. [12]
[M23/22] Assess whether supply-side policies are the most effective way to correct a deficit on the current account of the balance of payments of an economy. [12]
[W22/21] Discuss whether protectionist policies would be the most effective way to correct a current account deficit on the balance of payments in an economy. [12]
[W20/21] Discuss whether supply-side policies are an effective way of correcting a deficit on an economy's current account of the balance of aments. [12]
[W19/23] The largest economy in the world, the United States (US), records a persistent deficit on its current account of the balance of payments. Discuss what is likely to be the most effective way to reduce this deficit. [12]
With a total of four policies, there are six possible combinations to consider.
Monetary vs Fiscal
Monetary vs Supply-side
Monetary vs Protectionist
Fiscal vs Supply-side
Fiscal vs Protectionist
Supply-side vs Protectionist
These questions are relatively easy, and the essay plan remains the same as before.
Introduction
Analysis - How policy 1 reduces CA deficit - Limitation - How policy 2 reduces CA deficit - Limitation
Evaluation
Conclusion
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