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JAMB Economics 2010 Question 47

Question 47

Balance of Payments and Exchange Rates

If Nigeria imports vehicles from Japan, the transaction will appear as a

  1. A.debit on Japan's balance of payments
  2. B.credit on Japan's balance of payments
  3. C.credit on Nigeria's balance of trade
  4. D.credit on Nigeria's balance of payment.
Show the answer and explanation

Answer: B (credit on Japan's balance of payments)

Explanation

Japan earns money from the export, so it is a credit for Japan (and a debit for Nigeria).