Country T is a small island economy. Its current account balances last year are shown below.
| Component | Balance last year (£ billion) |
|---|---|
| Trade in goods | -6.0 |
| Trade in services | +4.5 |
| Primary income | -0.8 |
| Secondary income | +1.1 |
Last year, Country T earned £5.0 billion from foreign tourists and spent £2.0 billion on imported fuel.
This year, earnings from foreign tourists fall by 20% and spending on imported fuel falls by 15%. All other flows are the same as last year.
Calculate Country T's current account balance for this year. Show your working.
52 exam-style questions on OCR GCSE Economics 4.2 Balance of payments, covering 4.2.1 Balance of payments on current account, 4.2.2 Balanced account, surplus and deficit, 4.2.3 Calculate deficits and surpluses, 4.2.4 Analyse exports and imports data, 4.2.5 Importance of the balance of payments, and 4.2.6 Causes of surpluses and deficits. Each one has a worked solution and a mark scheme showing where the marks go.