Balance of Payments Ch. 28

How is the purchase of imported cars recorded in Australia's BoP?

• As a goods credit in the current account

• As a goods credit in the income account

• As a goods credit in the capital account

• As a goods debit in the current account

How is spending by tourists visiting Australia recorded in the BoP?

• As a service debit in the current account
• As an income credit in the current account
• As a service credit in the current account
• As a service credit in the capital account

How is the payment of interest on foreign loans recorded in Australia's BoP?

• As a primary income debit in the current account

• As a service debit in the current account

• As a foreign investment debit in the financial account

• As a secondary income credit in the current account

Expenditure by Toyota Australia, on freight costs for imported cars, is recorded in the balance of payments as

• an income debit in the current account
• a service debit in the current account
• a service deficit in the current account
• an income deficit in the current account

Development aid is different from emergency relief in that

• it is responsive to natural disasters

• its aim is to build the productive capacity of the recipient

• it is impossible to plan in advance.

A rise in import spending would, ceteris paribus,

• increase an existing Balance on Goods and Services deficit.
• reduce an existing current account deficit

A payment for which nothing of economic value is received in return is called

• a transfer payment
• a waste of money
• a Dead Weight Loss

The Australian govt spent $19m on the construction of the Thai-Laos Friendship bridge across the Mekong River. This payment was recorded in the Balance of Payments as

• a debit in secondary income
• a debit in the Financial account
• a capital transfer debit

The structural component of Australia's  Current Account Deficit (CAD) is

• the net income deficit.
• the trade balance.
• the fact that we spend too much on imports.

Australia's trade balance is

• always a deficit
• always a surplus
• the cyclical component of the CAD
• a national disgrace