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Balance Of Payment Deficit May Be Caused By? - Erudites Academy

A. revaluation of currency
B. sales of foreign reserves
C. unrestricted exports
D. unrestricted imports

Correct Answer: Option D

D. unrestricted imports

Explanation

A balance of payment is a situation in which imports of goods, services, investment income, and transfers exceed the exports of goods, services, investment income, and transfers. If a country doesn’t restrict the importation of goods or services, it will end up with a deficit payment balance. i.e, it will pay out more of its money and investment to foreigners. this can crumble the economy.

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