CAIE IGCSE Economics 6.4 Current Account of the Balance of Payments Topic Practice

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Question 1

[Maximum number: 1]

The table shows a selection of economic data for a country.

Table for Question 1 — CAIE IGCSE Economics

What is the current account balance of the balance of payments of this country?

A

$100 m\$ 100 \mathrm{~m}

B

$600 m\$ 600 \mathrm{~m}

C

$4500 m\$ 4500 \mathrm{~m}

D

$4725 m\$ 4725 \mathrm{~m}

Question 2

[Maximum number: 1]

What is most likely to directly result from a persistent and large current account surplus on the balance of payments of a country?

A

a lower exchange rate

B

a lower standard of living

C

an increase in gross domestic product

D

an increase in the unemployment rate

Question 3

[Maximum number: 1]

What is a consequence of a surplus on the current account of the balance of payments?

A

a decrease in GDP

B

a decrease in unemployment

C

a depreciation of the foreign exchange rate

D

deflation

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