Practice Current Account (6.1.1) - THE BALANCE OF PAYMENTS

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6 sample questions

Question 1.
What is recorded in the Current Account?
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Think about trade and financial flows.
Question 2.
Define Balance of Trade.
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Consider what it measures.
3Question 3.
What does a Current Account record?
- Trade in goods and services
- Only exports
- Only imports
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Think about the components that make up the Current Account.
4Question 4.
True or False: A current account deficit means a country is borrowing from other countries.
- True
- False
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Consider the implications of net imports versus exports.
Question 5.
A country has exports worth $300 billion and imports worth $400 billion. Calculate the Current Account balance and discuss the implications of a deficit.
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Consider how the relationship between imports and exports influences the economy.
Question 6.
Analyze how an increase in remittances from abroad could affect a country's Current Account balance.
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Think about the effect of money flows without goods exchanged.

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