Expenditure-reducing policies
What Expenditure-reducing policies means in Economics A-Level, as defined for AQA.
Definitions of Expenditure-reducing policies
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Reference: AQA
Measures that lower a current account deficit by compressing overall domestic demand, for example contractionary fiscal or monetary policy such as raising income tax.
Policies, like raising interest rates, that lower overall demand to suppress import demand when reducing a current account deficit.
Policies such as raising interest rates that a deficit country implements to reduce overall demand.
Topics that use Expenditure-reducing policies
- The balance of payments (AQA A-Level)
Related terms
- Balance of payments
- Capital account
- Competitiveness
- Current account
- Current account deficit
- Exchange rates
- Expenditure-switching policies
- Financial account
Using Expenditure-reducing policies in the exam
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