Topic Questions (EASY): Current Account of BoP

Using the table below which displays an extract from a country's balance of payments accounts, what are the values of export of goods (G) and balance of trade in services (H)?

A

B

C

D

Under what circumstances is a current account deficit likely to deteriorate?

When the government implements a contractionary macroeconomic policy.

When the government devalues the currency.

When the prices of inelastic imported goods increase significantly.

When the tariffs are placed on demand-elastic imported goods.

If the price of an internationally traded good rises, which group is likely to be most negatively affected?

high-income countries that aim to be self-sufficient

high-income countries that export the good and have a balance of payments surplus

low-income countries that rely on importing the good

low-income countries that have alternative sources of the good