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:
- earnings on German shares owned by UK citizens
- expenditure by US tourists in the UK
- the payment by a UK firm to a Japanese firm to transport its goods
- 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
- This is a credit item but it appears in the income/primary income section of the current account of the balance payments.
- 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.
- This appears in trade in services but as a debit item of the current account of the balance payments.
- This is a credit item but it appears in the financial account of the balance of payments.
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