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JAMB Economics 1989 Question 39

Question 39

Balance of Payments and Exchange Rates

ITEM | AMOUNT (Million Naira)
Visible exports | 55.54
Visible imports | 53.32
Invisible exports | 30.56
Invisible imports | 28.70
Balance | 4.08
The amount, N4.08 million, shown as balance in the table above represents

  1. A.terms of payments
  2. B.balance of current accounts
  3. C.balance of trade
  4. D.terms of trade.
Show the answer and explanation

Answer: B (balance of current accounts)

Explanation

Visible plus invisible items make up the current account: (55.54 + 30.56) − (53.32 + 28.70) = 4.08. The balance of trade would use visible items only (2.22).