Our site uses cookies. Some of the cookies we use are essential for parts of the site to operate and have already been set. You may delete and block all cookies from this site, but parts of the site will not work. To find out more about cookies on this website, see our Cookie Policy
Accept
© eRevision.uk and ZigZag Education 2025
This test is run by .
Note that your final mark will not be saved in the system.

Balance of payments GapFill

Target Level
C
Running Total
0
0%
Attempt
1 of 3

You must fill all the gaps before clicking ‘Check Answers!’

The balance of payments is the measurement of a country's annual income and outgoings relative to the rest of the world. There are a number of different economic flows which combine to produce the balance of payments, and it is important to be able to distinguish between them.

The primary measures of exchange within the balance of payments produce the current account. This consists firstly of   incometrustsinternational aidthe balance of trade, which measures the value of exports minus the value of imports. Secondly,   transferstruststhe capital accountincome earned by citizens who own assets abroad, minus the value generated from foreign-owned domestic assets. Examples of such assets could be properties or business investments. Thirdly,   truststhe capital accounttransfersincome of money received from foreign governments, minus money paid out to foreign governments. Examples of this could be money the UK receives from the EU, or money the UK pays out to foreign governments in the form of  incomeinternational aidtransferstrusts.

Another contributor to the balance of payments is   transferstruststhe capital accountincomes, which represents exchanges in the ownership of assets.

The final contributor to the balance of payments is the financial account. This consists firstly of  the Bank of Englandportfolio investmentreserve assetsdirect investment into the country by a foreign investor, minus domestic investment into a foreign country. Secondly,  direct investmentthe Bank of Englandreserve assetsportfolio investment, which measures flows of  equityportfolio investmentthe Bank of Englandreserve assets: investments that may have debts or other liabilities attached to them. Thirdly,  reserve assetsfinancial derivativesportfolio investmentdirect investment, which measures the flows of financial products that are attached to assets, such as options and futures. Finally, the value of  portfolio investmentfinancial derivativesequityreserve assets which are held in the UK by  the Bank of Englandequityreserve assetsportfolio investment and in other countries by their respective monetary authorities. These include national gold stockpiles, or national possession of foreign currencies. 

This is your 1st attempt! You get 3 marks for each one you get right. Good luck!

Pass Mark
72%