Meaning of Balance of Payment - SS3 Economics Past Questions and Answers - page 1
1
What does the balance of payment record?
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A
All financial transactions made between a country and the rest of the world
B
Only financial transactions related to imports
C
Only financial transactions related to exports
D
Financial transactions made within a country
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2
What is the current account component of the balance of payment?
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A
Records all transactions related to the purchase and sale of assets
B
Records all international transactions related to the trade of goods and services, income, and current transfers
C
Records all transactions related to foreign direct investment
D
Records all transactions related to loans
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3
What is the capital account component of the balance of payment?
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A
Records all international transactions related to the trade of goods and services, income, and current transfers
B
Records all transactions related to the purchase and sale of assets
C
Records all transactions related to foreign direct investment
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D
Records all transactions related to loans
4
What does a current account deficit indicate?
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A
A country is relying too much on imports and not producing enough for export
B
A country is attracting enough foreign investment to support its economic growth
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C
A country is exporting more goods and services than it imports
D
A country is not investing enough in other countries
5
What is the importance of the balance of payment?
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A
Provides insight into a country's economic health and its level of international financial transactions
B
Records all transactions made within a country
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C
Provides insight into a country's level of domestic transactions
D
Records only financial transactions related to exports
6
What does a capital account deficit indicate?
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