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 Form 4 Business studies lessons and notes on international trade

Causes of surplus in balance of payment

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Answer Text:
Causes of surplus in balance of payment
-increased demand for country’s exports that increases foreign exchange earnings.
-favourable terms of trade that is where the value of exports exceeds the value of imports.
-reduced private capital flight.
-increased capital in-flow arising from laons or foreign
investment from other countries.
-reduced outflow of public capital.
-devaluation of a country’s currency resulting to increased exports and less imports.
-restricted importation of goods compared to the exports.


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