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Balance of payments

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Question 1

An economy records the following two international transactions:

  1. A domestic commercial bank receives 50 million in interest payments from loans extended to foreign corporations.
  2. The domestic government writes off 120 million of bilateral debt owed to it by a developing nation.

In which components of the Balance of Payments accounts are these transactions recorded?

A

Transaction 1: Financial account; Transaction 2: Capital account

B

Transaction 1: Current account; Transaction 2: Financial account

C

Transaction 1: Current account; Transaction 2: Capital account

D

Transaction 1: Financial account; Transaction 2: Current account

Markscheme

Balance of payments Questions

  1. A Level
  2. /Economics
  3. /Balance of payments

38 exam-style questions on OCR A Level Economics Balance of payments. Each one has a worked solution and a mark scheme showing where the marks go.

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