Question 48
Balance of Payments and Exchange RatesWhen a foreigner on a visit to Nigeria pays for hotel accommodation and meals with some foreign currency, the amount paid should be recorded in Nigeria's balance of payments as an item of
- A.Nigeria's invisible export trade
- B.Nigeria's import trade
- C.Nigeria's visible trade
- D.foreign capital inflow into Nigeria
Show the answer and explanation
Answer: A (Nigeria's invisible export trade)
Explanation
Services sold to foreigners (tourism) earn foreign exchange but involve no goods crossing the border, so they are invisible exports.