Question

which of the following is not the cause of the deficit in the balance of payments
OA) globalization
B) capital inflows
C) increase in imports
D) fall in exports​

Answer 1

Answer:

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Answer 2

Capital inflow is not the cause of the deficit in the balance of payments (Option B).

• When there is a deficit in the balance of payment or trade, the demand for foreign currency rises, and also the loss of national currency is caused. Such a condition causes depreciation to occur.
• When the amount of money is used with the intention of trading, business, and investment, it is known as capital inflow.
• Capital inflow refers to the flow of money within a country for the purpose of foreign investment.