Question : A decrease in tourism receipts leads to a _____________in the current account balance.
Option 1: increase
Option 2: decrease
Option 3: surplus
Option 4: deficit
Answer (1)
19th Jan, 2024
Correct Answer: decrease
Solution :
The correct answer is (b) decrease
Tourism receipts are considered a part of the services exports in the current account. When there is a decrease in tourism receipts, it means that the country is earning less from tourism activities, which contributes to a decrease in the current account balance. This decrease can lead to a smaller surplus or a larger deficit in the current account, depending on the overall balance of other components such as trade in goods, income balance, and transfer payments.
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