Economics 2281 · O Level · Current account of balance of payments
Current account of balance of payments — practice question
In 2019, China’s economic growth rate stood at 6.1%, and Chinese households spent more. A greater number of Chinese people went to sports events, and the income of leading sportspeople rose. China exported more, even though tariffs on some of its products increased. For instance, the US raised tariffs on Chinese tea and coffee imports.
(a)[2]
Identify the opportunity cost of households spending their income and the opportunity cost of Chinese firms exporting goods and services.
(b)[4]
Explain two reasons why some top sportspeople have high earnings.
(c)[6]
Analyse the reasons for imposing tariffs on imports.
(d)[8]
Discuss whether a country with a high economic growth rate will necessarily have a deficit on the current account of its balance of payments.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “saving money” …