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Balance of Payments: Current Account & Measuring Foreign Trade

Instructions:

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question 1 of 3

Which of the following is NOT a component of the current account?

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1. Latervia is a very small country that has exports of $100,000, imports of $20,000, net income from abroad $250,000, and net current transfers $200,000. What is Latervia's current account?

2. Why can the currency exchange rate have a large impact on the trade balance?

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About This Quiz & Worksheet

With this quiz and worksheet, you can test your knowledge of the current account and measuring foreign trade. Make sure you understand the components of the current account, how it's calculated and what may impact it before trying the quiz.

Quiz & Worksheet Goals

This quiz/worksheet combo will test you on the following:

  • What components do - and do not - make up the current account
  • The definition for calculating current account
  • The additional factor that can hugely impact current account
  • True/false statements about the current account
  • Economic terms that describe or are associated with foreign trade

Skills Practiced

You may work on the following skills while using this quiz and worksheet:

  • Reading comprehension - ensure that you draw the most important information from the related lesson on the current account and measuring foreign trade
  • Interpreting information - verify that you can read information regarding the economic terms that relate to foreign trade and interpret it correctly
  • Knowledge application - use your knowledge to answer questions about impacts on the current account

Additional Learning

Find more details in the corresponding lesson called Balance of Payments: Current Account & Measuring Foreign Trade. This lesson covers the following objectives:

  • Define balance of payments
  • Describe what the current account is
  • Understand how to calculate the current account
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