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Question : When does the problem of unfavourable balance of payments arise?

Option 1: Imports > Exports

Option 2: Exports = Imports

Option 3: Inflation decreases

Option 4: No option is correct


Team Careers360 22nd Jan, 2024
Answer (1)
Team Careers360 23rd Jan, 2024

Correct Answer: Imports > Exports


Solution : The correct answer is Imports > Exports

An unfavourable balance of payments problem occurs when a country's imports exceed its exports. This situation can emerge for a variety of reasons and can have economic consequences. Trade imbalances, capital flows, currency rate fluctuations, government policies, and external shocks are all common causes of an unfavourable balance of payments. They also include trade imbalances, in which a country purchases more than it sells, and capital outflows surpass inflows.

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