Question:
Trade in services is a component of the current account of the balance of payments. Which one of the following is an example of a trade in services?
(1) Development aid for foreign countries
(2) Export revenue from primary commodities
(3) Workers’ remittances
(4) Earnings from foreign tourists
(5) Coupon payments for portfolio investments
Correct Answer:
(4)
Answer Explanation:
Tourism is classified as a service export because foreign nationals are traveling to the host country to consume hospitality, transport, and entertainment services.
Topic: Balance of Payments Year: 2023
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