The current account

Question 1

Four parts of the CA:

Answer 1

• Balance on merchandise trade
• Net services
• Net primary income
• Net secondary income

Question 2

Balance on merchandise trade

Answer 2

Made up of merchandise export receipts, minus merchandise import payments.

Question 3

Net services

Answer 3

Made up of services export receipts minus service import payments. (tourism)

Question 4

Net primary income

Answer 4

Made up of receipts of income from holding foreign assets minus payments of income to service foreign liabilities. (Interest and shares)

Question 5

Net secondary income

Answer 5

Involves a one-way movement of money where nothing is expected in return. (Gifts)