The table shows a country’s exports and imports.
| $m | |
|
exports of goods imports of goods exports of services imports of services |
200 190 35 38 |
What was the country’s balance of trade in goods and services?
a deficit of $7 million
a deficit of $13 million
a surplus of $7 million
a surplus of $13 million
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Which measure would a government take to reduce a current account deficit?
increase tariffs
increase value added tax
reduce income tax
reduce domestic subsidies
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A government is faced with an unwanted deficit on the current account of its balance of payments.
Which action is most likely to reduce the deficit?
raising government spending on welfare benefits
reducing income tax
restricting imports by raising tariffs
revaluing its currency
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In July 2015, Australia’s balance of trade with the rest of the world was –2809 billion Australian dollars. In January 2016 it was –3294 billion Australian dollars.
What describes Australia’s balance of trade over this period?
| balance of trade | trend | |
|
A B C D |
deficit deficit surplus surplus |
improving worsening improving worsening |
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In 2012 the UK held the Olympic Games, which attracted a large number of visitors from foreign countries.
Which item of the UK’s current account balance will have benefited directly from this event?
export trade in goods
export trade in services
import trade in goods
import trade in services
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The table shows a selection of economic data for a country.
| $ m | |
|
primary income (net income transfers) secondary income (net current transfers) total value of exported goods total value of imported goods total value of exported services total value of imported services |
1000 -500 1000 2000 800 200 |
What is the current account balance of this country?
$100 m
$600 m
$4500 m
$4725 m
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What would cause a rise in the deficit on the current account of the balance of payments?
a fall in foreign direct investment into the country
a fall in interest earned on overseas investment by the country
a fall in the value of imported manufactured goods into the country
a rise in the revenue earned from tourism in the country
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What would not be included in the current account of the balance of payments?
dividends earned from a firm in another country
imports of TVs from another country
purchase of a house in another country
rents paid to owners of land in another country
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The diagram shows the value of a country’s exports and imports of goods over five years.
Between which two years did the country have an increase in the value of imports and an improvement in its balance of trade in goods?
1 and 2
2 and 3
3 and 4
4 and 5
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Which item will register as an outflow on the services section of the current account of the US balance of payments?
money paid by chemical producers in the US for foreign oil
money paid by foreign firms for US cars
money paid by migrant workers in the US to their families overseas
money paid by US tourists visiting attractions in other countries
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A country wishes to increase a current account surplus on the balance of payments.
Which action would it take?
abolish an import quota
increase import tariffs
remove export subsidies
tax export producers
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The diagram shows the value of a country’s exports and imports of goods over five years.
Between which two years did the country have an increase in the value of imports and an improvement in its balance of trade in goods?
1 and 2
2 and 3
3 and 4
4 and 5
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What would cause a favourable change in the Kenyan trade in services (invisible) account?
A Kenyan company wins a contract to transport exports from Uganda.
A Kenyan tea company increases its exports.
A Kenyan trade delegation promoting coffee sales visits India.
A Zambian company increases its exports to Kenya.
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The table shows information from a country’s current account of its balance of payments.
| $ billion | |
|
exports of goods imports of goods net services net primary income net secondary income |
20 24 +5 -8 -8 |
What is the country’s current account balance?
+$1 billion
–$4 billion
–$7 billion
–$15 billion
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What is most likely to happen if South Korea builds a factory in Switzerland that becomes profitable?
South Korea’s imports of goods will decrease.
South Korea’s investment income will increase.
Switzerland’s trade balance in goods will worsen.
Switzerland’s trade balance in services will improve.
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Which government policy is most likely to improve a country’s balance of trade?
a decrease in direct taxation
a decrease in the exchange rate
a decrease in the level of tariffs
an increase in government expenditure
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It is estimated that in 2016 the Olympic Games in Rio, Brazil attracted over 600 000 foreign visitors.
What is likely to have been the result of this number of visitors?
a depreciation of Brazil’s currency
a fall in Brazil’s rate of inflation
an increase in the Brazilian government’s budget deficit
a reduction in Brazil’s deficit on the current account of its balance of payments
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