A-LevelEconomicsMacroeconomics: Balance of PaymentsMay/June 2012Paper 1 Q221 Mark
A firm borrows money from a bank based abroad in order to pay a lower rate of interest than is available from banks in its own country. Which two parts of the balance of payments accounts will be affected by this transaction?
Acapital account and currency reserves
Bcapital account and trade in services
Cfinancial account and net income flows
Dfinancial account and net current transfers
✓ Correct Answer
The correct answer is C. This question tests the candidate's understanding of macroeconomics: balance of payments within the Economicssyllabus. The examiner's mark scheme requires...
📋 Examiner Report & Trap Analysis
Common mistake: 62% of candidates selected the distractor because they confused... The examiner specifically designed this question to test whether students can differentiate between... To secure full marks, candidates must demonstrate...
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