Economics 2281 · O Level · 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, Japan’s imports increased more quickly than its exports, yet the current account of its balance of payments still recorded a surplus. Around the world, stronger trade was prompting the opening of new airports to satisfy demand for moving goods.
(a)[2]
Define what is meant by ‘capital good’.
(b)[4]
Explain two reasons why export revenue for a country might rise when export prices increase.
(c)[6]
Analyse how a government might raise 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.