Economics 0455 · IGCSE · Current account of balance of payments
Current account of balance of payments — practice question
Capital goods account for more than half of Japanese exports. In 2013, even though Japan’s imports climbed faster than its exports, the current account of its balance of payments still showed a surplus. Globally, rising trade was prompting the opening of new airports to meet the need to transport goods.
(a)[2]
Define the term ‘capital good’.
(b)[4]
Explain two reasons why a country’s export revenue may increase when export prices increase.
(c)[6]
Analyse how a government could enlarge the surplus on the country’s current account of the balance of payments.
(d)[8]
Discuss whether new airports ought to be built and run by governments or by the private sector.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “A good made by people” …