Page 109 - F1 - AB Integrated Workbook STUDENT 2018-19
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External analysis – economic factors
7.6 Managing the balance of trade
Why we want to avoid a Why we want to avoid a
long term deficit long term surplus
It will have to borrow money to fund A long-term trade surplus can
the deficit, resulting in extra interest cause significant inflationary
payments. pressures.
The alternative is to sell assets. A long term surplus is presumably
at the expense of other countries'
There will be pressure on the deficits.
country's currency to depreciate
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