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Dear Sir,
I have a question in F1 mock exam , how to understand this sentence : “When a county is in deficit, it is importing more goods and services that is exporting, that will weaken its currency .”
Thanks a lot for your reply !I don’t know what it actually says, but it should say: when a country is in deficit it is importing more goods and services than it is exporting, that will weaken it’s currency.
So, if the UK is importing more from the USA than it is exporting, it needs extra US dollars to pay suppliers. It therefore must sell £ and buy dollars. Market forces will drive down the value of the £ (being sold) and drive up the $ (being bought)
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