An economy with a strong export sector has been accumulating large surpluses in its current account. While this indicates a competitive export sector, it also leads to appreciation of the domestic currency, making exports more expensive and imports cheaper. This situation could potentially harm domestic industries and create economic imbalances. The government is contemplating measures to manage the current account surplus and maintain economic stability. The question is: In this scenario, the government's intervention should primarily focus on: A) Continuously increasing the current account surplus B) Managing the current account surplus to prevent economic imbalances C) Restricting all forms of imports D) Devaluing the domestic currency
An economy with a strong export sector has been accumulating large surpluses in its current account. While this indicates a competitive export sector, it also leads to appreciation of the domestic currency, making exports more expensive and imports cheaper. This situation could potentially harm domestic industries and create economic imbalances. The government is contemplating measures to
The question is: In this scenario, the government's intervention should primarily focus on:
A) Continuously increasing the current account surplus
B) Managing the current account surplus to prevent economic imbalances
C) Restricting all forms of imports
D) Devaluing the domestic currency
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