Discussion :

International Economics

Consider the following statements regarding correction in Balance of Payment (BoP)
1. Money contraction will result in correction in BoP deficit
2. Contraction in money supply will reduce the domestic prices and hence increase the import resulting into correction in BoP deficit
3. Increase in tourism services will have positive impact on BoP
Select the correct code

A. 1, 2 and 3
B. 2 and 3
C. 1 and 2
D. 1 and 3

Answer: Option D