Policies To Reduce a Current Account Deficit – 25 Mark A-Level Economics Question (Edexcel)

Exam Technique Tutoring : https://udoecon.com/a-level-economics... Economics Group Chat : https://beacons.ai/udoecon About this video : This video is a walkthrough of a 25 mark A-Level Economics exam question on reducing a current account deficit, based on the Edexcel specification. We go step-by-step through how to structure a high-level essay, focusing on building clear chains of analysis, applying real-world examples such as the US-China trade war, and developing strong evaluation throughout. The aim of the video is to show how to approach 25 markers effectively under exam conditions. I explain how policies such as expenditure switching, monetary policy, subsidies, and the use of foreign currency reserves can help reduce a current account deficit through improving export competitiveness and reducing imports. I also break down the limitations of these policies, including inflationary pressures, retaliation risks, time lags, and the importance of factors such as the Marshall-Lerner condition and the J-Curve effect. Questions in the video: Evaluate macroeconomic policies that could be used to reduce a current account deficit. Refer to a country of your choice in your answer. Timestamps: 00:00 Introduction to Question 01:21 Foreign Currency Reserves 02:12 Expansionary Monetary Policy 03:12 Expenditure Switching Policies 05:41 US-China Trade War 09:23 Subsidizing Domestic Producers 17:12 Subsidy Evaluation 22:31 Foreign Currency Reserves Analysis 25:30 Marshall-Lerner and J-Curve Topics covered: Current account deficit, Expenditure switching policies, Monetary policy, Exchange rates, Subsidies, Foreign currency reserves, Marshall-Lerner condition, J-Curve effect, Trade balance, Evaluation