BoP 36qs Y12 Econ A Level

Exports are: Choose the correct answer.

• Goods and services bought from foreign countries

• Goods and services sold to foreign countries

• Money sent abroad as aid

• None of the above

Are exports considered an inflow or outflow of money in the balance of payments?

• Inflow

• Outflow

• Neither inflow nor outflow

• Depends on the country

List the three main components that make up the balance of payments.

• The current account, the capital account and financial account, and the balancing item.

• The trade account, the investment account, and the reserve account.

• The income account, the expenditure account, and the surplus account.

• The export account, the import account, and the deficit account.

Imports are: Choose the correct answer.

• Goods and services bought from foreign countries

• Goods and services sold to foreign countries

• Money received from abroad

• None of the above

The sum of the accounts in the balance of payments should be zero, and a balancing item is used to cover discrepancies.

• True

• False

What does a current account surplus mean?

• There is a net inflow of money into the circular flow of income.

• There is a net outflow of money from the circular flow of income.

• The government is running a budget deficit.

• The country is experiencing high inflation.

Are imports considered an inflow or outflow of money in the balance of payments?

• Outflow

• Inflow

• Neither inflow nor outflow

• Both inflow and outflow

What is recorded in the balance of payments?

• All financial transactions made between consumers, firms, and the government from one country with other countries.

• Only the trade of goods between countries.

• Only the government’s international transactions.

• Only the transactions of multinational corporations.

What does it mean if a country has a net current account deficit?

• The country spends more on imports from foreign countries than it earns from exports to foreign countries.

• The country has a budget surplus and exports more than it imports.

• The country is experiencing rapid economic growth and has no trade with other countries.

• The country only exports goods and does not import any goods.

Which of the following is a result of the appreciation of the currency?

• A) Imports become cheaper and exports become more expensive, worsening the current account deficit.

• B) Imports become more expensive and exports become cheaper, improving the current account deficit.

• C) Both imports and exports become cheaper.

• D) Both imports and exports become more expensive.