What are the two primary sections of the Balance of Payments (BoP)?

Current account and capital account

Financial account and trade account

Services account and income transfers

Goods account and financial transfers

How are money inflows and outflows recorded in the Balance of Payments?

Inflows as debits (-) and outflows as credits (+)

Inflows as credits (+) and outflows as debits (-)

Both inflows and outflows as credits (+)

Both inflows and outflows as debits (-)

What does a surplus in the current account of the Balance of Payments indicate?

Financial transfers are balanced

Services exports exceed services imports

Which of the following is included in the current account of the Balance of Payments?

Net income from international dealings

What is a consequence of a current account deficit?

Increased employment opportunities

How can a government address a current account deficit through expenditure-switching policies?

Implementing protectionist measures

How do expenditure-reducing strategies help stabilize the current account balance?

By decreasing government spending

By reducing consumer disposable income

What is a supply-side initiative that governments can use to enhance the current account balance?

Decreasing infrastructure investment

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