Current account of the balance of payments — Paper 1 · IGCSE Economics (9-1) 0987

29 What is included as part of the current account of the balance of payments? A all government income and expenditure B money withdrawn from a bank account C investments in other countries by manufacturers D trade in goods and services

1 marks

Answer: D

This question in 0987/11 May/June 2020

30 The table shows components of Japan’s current account balance in trillion Yen (¥) for 2011 and 2012. balance of balance of balance of balance of goods year services primary income secondary income ¥ trillion ¥ trillion ¥ trillion ¥ trillion 2011 –1.61 –1.76 14.04 –1.11 2012 –5.23 –2.33 13.55 –1.02 Which balance improved between 2011 and 2012? A balance of goods B balance of services C balance of primary income D balance of secondary income

1 marks

Answer: D

This question in 0987/11 May/June 2020

30 The table shows components of Japan’s current account balance in trillion Yen (¥) for 2011 and 2012. balance of balance of balance of balance of goods year services primary income secondary income ¥ trillion ¥ trillion ¥ trillion ¥ trillion 2011 –1.61 –1.76 14.04 –1.11 2012 –5.23 –2.33 13.55 –1.02 Which balance improved between 2011 and 2012? A balance of goods B balance of services C balance of primary income D balance of secondary income

1 marks

Answer: D

This question in 0987/12 May/June 2020

28 A country wishes to increase a current account surplus on the balance of payments. Which action would it take? A abolish an import quota B increase import tariffs C remove export subsidies D tax export producers

1 marks

Answer: B

This question in 0987/12 Oct/Nov 2020

29 The table shows a country’s exports and imports. $m exports of goods 200 imports of goods 190 exports of services 35 imports of services 38 What was the country’s balance of trade in goods and services? A a deficit of $7 million B a deficit of $13 million C a surplus of $7 million D a surplus of $13 million

1 marks

Answer: C

This question in 0987/12 Oct/Nov 2020

30 The diagram shows the value of a country’s exports and imports of goods over five years. 30 $m 25 key 20 exports of goods 15 imports of goods 10 5 0 1 2 3 4 5 year Between which two years did the country have an increase in the value of imports and an improvement in its balance of trade in goods? A 1 and 2 B 2 and 3 C 3 and 4 D 4 and 5

1 marks

Answer: C

This question in 0987/12 Oct/Nov 2020

30 A country has a deficit on its current account of its balance of payments. What could increase the size of its deficit? A increased exports of its services B increased international competitiveness of its goods C increased numbers of visitors from abroad D increased spending on its military bases abroad

1 marks

Answer: D

This question in 0987/11 May/June 2021

29 What may result from a balance of payments trade surplus? A The exchange rate appreciates and causes export prices to fall. B The exchange rate appreciates and causes export prices to rise. C The exchange rate depreciates and causes export prices to fall. D The exchange rate depreciates and causes export prices to rise.

1 marks

Answer: B

This question in 0987/12 May/June 2021

30 A country has a deficit on its current account of its balance of payments. What could increase the size of its deficit? A increased exports of its services B increased international competitiveness of its goods C increased numbers of visitors from abroad D increased spending on its military bases abroad

1 marks

Answer: D

This question in 0987/12 May/June 2021

28 The diagram shows China’s trade with Brazil for two years. China’s exports key year 1 China’s imports year 2 0 1 2 3 4 5 $ billion What happened to China’s trade balance with Brazil between year 1 and year 2? A It experienced a falling surplus. B It experienced a rising deficit. C It moved from deficit to surplus. D It moved from surplus to deficit.

1 marks

Answer: D

This question in 0987/12 Oct/Nov 2021

30 What is an immediate effect for a country of a fall in its foreign exchange rate? A a fall in the money supply B an increase in purchasing power C cheaper imports D more competitive exports

1 marks

Answer: D

This question in 0987/12 Oct/Nov 2021

29 What is most likely to result from a reduction in the value of a country’s currency if there are no other changes in the economy? A A trade in goods surplus will fall. B Export prices will rise. C Import prices will rise. D The inflation rate will fall.

1 marks

Answer: C

This question in 0987/12 May/June 2022

27 The table shows some details from a country’s balance of payments. The country has no secondary income (current transfers). item $ million exports of goods 280 imports of goods 350 exports of services 110 imports of services 60 net primary income – 40 What is the country’s balance on its current account? A a deficit of $60 million B a deficit of $160 million C a surplus of $20 million D a surplus of $760 million

1 marks

Answer: A

This question in 0987/12 Oct/Nov 2022

28 Vietnamese companies buy insurance from companies in the US. How will this transaction be recorded in the Vietnamese balance of payments? section credit / debit A trade in goods credit B trade in services credit C trade in services debit D current transfers debit

1 marks

Answer: C

This question in 0987/12 Oct/Nov 2022

30 Which policy measure is most likely to reduce the current account deficit of the balance of payments of an economy? A decrease the level of subsidies to domestic producers B increase infrastructure spending to increase domestic productivity C increase interest rates D remove import tariffs

1 marks

Answer: B

This question in 0987/11 May/June 2023

27 The table shows a country’s exports and imports. $m exports of goods 200 imports of goods 190 exports of services 35 imports of services 38 What was the country’s balance of trade in goods and services? A a deficit of $7million B a deficit of $13million C a surplus of $7million D a surplus of $13million

1 marks

Answer: C

This question in 0987/12 May/June 2023

29 What would increase the demand for a country’s currency on the foreign exchange market? A a decrease in its inward investment B a decrease in its rate of interest C an increase in its exports D an increase in its imports

1 marks

Answer: C

This question in 0987/12 May/June 2023

30 Country X has a persistent deficit on the current account of the balance payments. Which policy measure is most likely to improve this situation? A lowering import quotas B lowering income tax C lowering import tariffs D lowering export subsidies

1 marks

Answer: A

This question in 0987/12 May/June 2023

30 Many European firms employ workers from the Philippines. These workers send part of their income to relatives in the Philippines. In which part of the balance of payments current account for the Philippines would these transactions be recorded? A primary income B secondary income C trade in goods D trade in services

1 marks

Answer: B

This question in 0987/12 Oct/Nov 2023

29 The table shows the average exchange rate of the UK pound (£) to the US dollar ($), that is the amount of $ that can be bought with £1. exchange rate year UK£ / US$ 1 1.64 2 1.52 3 1.35 4 1.25 What is a likely effect of this change on the UK economy? A decreased cost-push inflation B decreased current account deficit C increased quantity of imports D increased trade deficit

1 marks

Answer: B

This question in 0987/12 May/June 2024

30 The table shows components of Japan’s current account balance in trillion yen (¥) for 2 years. balance of balance of balance of balance of goods year services primary income secondary income ¥ trillion ¥ trillion ¥ trillion ¥ trillion 1 –1.61 –1.76 14.04 –1.11 2 –5.23 –2.33 13.55 –1.02 Which balance improved between year 1 and year 2? A balance of goods B balance of primary income C balance of secondary income D balance of services

1 marks

Answer: C

This question in 0987/12 May/June 2024

30 The diagram shows the value of a country’s exports and imports of goods over five years. 30 $m 25 key 20 exports of goods 15 imports of goods 10 5 0 1 2 3 4 5 year Between which two years did the country have an increase in the value of imports and an improvement in its balance of trade in goods? A 1 and 2 B 2 and 3 C 3 and 4 D 4 and 5

1 marks

Answer: C

This question in 0987/12 Oct/Nov 2024

30 The table shows the values of the items in a country’s current account in two years. year 1 year 2 item ($m) ($m) balance of goods and −30 0 services net primary income −30 −20 net secondary income ? ? balance of current −50 +10 account How did the value of net secondary income change between year 1 and year 2? A decreased by $10m B decreased by $20m C increased by $20m D increased by $30m

1 marks

Answer: C

This question in 0987/11 May/June 2025

30 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

1 marks

Answer: B

This question in 0987/12 May/June 2025

29 Which combination of changes in export revenue and import expenditure is most likely to cause a country’s exchange rate to depreciate? export revenue import expenditure A decreases decreases B decreases increases C increases decreases D increases increases

1 marks

Answer: B

This question in 0987/12 Oct/Nov 2025

30 A government wishes to reduce the deficit on the current account of its balance of payments. Which policy should it adopt? A increase subsidies on exports B increase taxes on its exports C remove an embargo on imports D remove tariffs on its imports

1 marks

Answer: A

This question in 0987/12 Oct/Nov 2025