Essay Ken Hutchinson In 1994 the UK had a Balance of Payments current account deficit. Explain the possible effects that this deficit might have upon the economy Discuss what, if anything the UK Government could have done to reduce or eliminate this current account deficit. The balance of payments is a record of one country's trade dealings with the rest of the world. Any transaction involving UK and foreign citizens is calculated in sterling (UK pounds). …showed first 75 words of 664 total…

…showed last 75 words of 664 total…is where the country cuts all trade with the outside world by cutting off all imports and therefore protecting the home market from foreign competition Devaluation is where a fixed exchange rate drops the external price of its currency, as the UK did in 1967 when the rate changed from £1=$2.80 to £1=£2.40, this is referred to as a devaluation which means exports will now appear cheaper to foreigners while imports will seem more expensive to domestic customers.