Balance of Payments is one of 9 topics in the Grade 12 Economics CAPS syllabus, covered across 3 lessons on Study Vault. Below are real practice questions from this topic with full worked answers.
Sample practice questions
Easy
1. The balance of payments is a record of:
All economic transactions between a country's residents and the rest of the world over a period
Only government spending for a fiscal year
Only the exchange rate movements for a year
Only domestic transactions within a single country
Answer: All economic transactions between a country's residents and the rest of the world over a period — The BOP is a statistical record of all economic transactions between residents of a country and the rest of the world, usually compiled over a year.
Easy
2. Foreign direct investment, where a foreign entity takes a lasting, controlling interest in a South African business, is recorded in which account of the balance of payments?
The financial account
The current account only
The reserve account only
No account records this transaction
Answer: The financial account — The financial account records cross-border transactions in financial assets and liabilities, including foreign direct investment and portfolio investment.
Medium
3. What term describes one-way international money flows, such as remittances sent home by South Africans working abroad, that are recorded within the current account?
Answer: Current transfers — Current transfers are one-way flows, such as remittances or foreign aid, recorded within the current account, distinct from payments made in exchange for goods, services, or investment returns.
