Y11 Economics - C39 Current Account of Balance of Payment

What does the current account of the balance of payments primarily show?

• Total national debt

• Income received and expenditure made by a country

• Government spending

• Foreign investments

Which of the following is NOT a component of the current account?

• Primary income

• Trade in services

• Trade in goods

• Foreign direct investment

What indicates a current account surplus?

• Credit items value > debit items value

• No economic transactions

• Credit items value < debit items value

• Credit items value = debit items value

Which factor does NOT influence the value of a country's exports and imports?

• The country’s inflation rate

• Quality of goods and services

• Domestic GDP

• Political stability

What is a primary income component?

• Salary and wages earned abroad

• Expenditures on imports

• Revenue from exported goods

• Gifts and donations

Which of the following is a cause of current account deficit?

• Both B and C

• High exchange rate

• Low investment income from abroad

• High quality of domestic products

What is a consequence of a current account surplus?

• Higher unemployment rates

• Increased foreign debt

• Increased national savings

• Economic instability

Which policy is NOT used to correct a current account deficit?

• Imposing import restrictions

• Decreasing consumer spending

• Increasing exports

• Raising interest rates

What does a trade in goods surplus indicate?

• Equal exports and imports

• More exports than imports

• More imports than exports

• High foreign investment

Which of the following is a method to correct a current account surplus?

• Increase exports

• Reduce imports

• Stop import restrictions

• Increase foreign investment