CAIE A-Level Economics 11.1.1 Balance of Payments Accounts

CAIE A-Level Economics 11.1.1 Balance of Payments Accounts
Cambridge International AS & A Level Economics 9708 syllabus for exams in 2026, 2027 and 20282026–2028

Practise assigning trade, income and transfers to the current account and direct, portfolio or reserve-asset transactions to the financial account, then identifying deficit…

How this is tested

  • classify goods, services, primary income and secondary transfers in the current account
  • classify FDI, portfolio investment and official reserve assets in the financial account
  • explain financing a current-account deficit through financial inflows such as foreign investment

Question 25

[Maximum number: 1]

Which statement about the components of the balance of payments is correct?

A

The current account consists of transactions in goods, services, investment income and remittances between countries.

B

The current account consists of transactions in goods, services, and portfolio investment between countries.

C

The financial account consists of transactions in financial assets, investment income and remittances between countries.

D

The financial account consists of transactions in fixed assets, investment income and the balancing item between countries.