0455.6.4.2 — causes of current account deficit and surplus Reasons for deficits and surpluses.: past paper questions
Real questions on 0455.6.4.2 — causes of current account deficit and surplus reasons for deficits and surpluses.
The newest 8 of 8 written questions. Open one to see it on the real paper.
- 0455/02 · Specimen 2027 · Q2d[8]
Discuss whether or not an increase in a surplus on the current account of the balance of payments will increase living standards in a country.
See it on the paper → - 0455/22 · May/June 2026 · Q1b[2]
Identify two items that appear in Kuwait’s trade in services.
See it on the paper → - 0455/11 · October/November 2024 · Q29[1]
Which change in country X would have caused this?
See it on the paper → - 0455/11 · October/November 2024 · Q30[1]
What is the most likely cause of an increased current account surplus in a country?
See it on the paper → - 0455/23 · May/June 2022 · Q4b[4]
Explain how a country with more imports of goods than exports of goods can still record a surplus on the current account of its balance of payments.
See it on the paper → - 0455/23 · October/November 2021 · Q3d[8]
Discuss whether or not an increase in foreign MNCs will reduce a deficit on the current account of the balance of payments of a host country.
See it on the paper → - 0455/21 · October/November 2020 · Q2c[6]
how a country’s current account deficit might be reduced if its firms become internationally competitive.
See it on the paper → - 0455/21 · October/November 2019 · Q5c[6]
Analyse the consequences of an appreciating currency on the current account of the balance of payments of a country.
See it on the paper →
What examiners said
Very few candidates understood the reasoning behind this question. The basis of a good answer was to identify the composition of the current account of the balance of payments: trade in goods, trade in services, primary income and secondary income. Understanding the contribution of the last two components enabled a candidate to see that a surplus could still be achieved, even if exports of goods a...
— Examiner report, May/June 2022, 0455/23 Q4(b) (Cambridge)
Candidates understood what a foreign MNC was. However, fewer were able to discuss the actions that MNCs took which would or would not result in a reduction in a deficit on a current account of the balance of payments. This in part was due to not understanding what a deficit was and, in some cases, confusing the term with government taxation and expenditure. Strong answers explained how MNCs were l...
— Examiner report, October/November 2021, 0455/23 Q3(d) (Cambridge)
Successful candidates used the terms exports and imports in their analysis whereas weaker answers were too vague. Strong answers defined an appreciating currency as a rise in its value, then analysed how that implied higher export prices and lower import prices which, in turn, could reduce demand for exports and increase demand for imports, leading to a potential increase in the current account de...
— Examiner report, October/November 2019, 0455/21 Q5(c) (Cambridge)
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