The principal monetary policy objective is to reduce substantially the import surplus of the coming years while resuming economic growth. Realization of this goal entails a marked structural change of the economy, which can be brought about by freezing the standard of living (per capita private consumption plus public services) and restricting investments that do not further exports. The writer of the above policy assumes:

A Econimic growth will result in a structural change of the economy.

B Only if people consume less the economy grow

C The import surplus can be reduced if investment is restricted.

D Only a structural change in the economy can substantially increase imports.

Solution

Correct Answer: Option C

Solution

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