Economics Multiple Choice Question – 6 August 2019

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

Which of the following would appear as a credit item in the trade in services balance of the UK’s balance of payments?

Select ONE answer:

  1. earnings on German shares owned by UK citizens
  2. expenditure by US tourists in the UK
  3. the payment by a UK firm to a Japanese firm to transport its goods
  4. the purchase of a UK firm by an Indian multinational company

Show your workings to arrive at your answer, and explain and justify your reasons:……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Economics KS5 classes.

The answer is 2

  1. This is a credit item but it appears in the income/primary income section of the current account of the balance payments.
  2. Correct: This is a credit item as it is money entering the country. It appears in trade in services under the title ‘travel’ of the current account of the balance payments.
  3. This appears in trade in services but as a debit item of the current account of the balance payments.
  4. This is a credit item but it appears in the financial account of the balance of payments.

 

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