DP Economics
Question 19N.3.HL.TZ0.3a.iii
| Date | November 2019 | Marks available | [Maximum mark: 2] | Reference code | 19N.3.HL.TZ0.3a.iii |
| Level | HL | Paper | 3 | Time zone | TZ0 |
| Command term | State | Question number | a.iii | Adapted from | N/A |
a.iii.
[Maximum mark: 2]
19N.3.HL.TZ0.3a.iii
In the country of Gardia, the currency is the gamma. The exchange rate of the United States dollar (US$) to the gamma is US$ 1 = 6.20 gamma.
(a.iii)
State two factors that could cause Gardia’s current account to be in deficit, even though its balance of trade in goods is in surplus.
[2]
Markscheme
Possible factors may include:
- Gardia could have a (greater) deficit on its services account, eg in transport or insurance or tourism.
- Gardia could have a (greater) deficit on its income account, eg in profits, interest or dividends on its overseas assets or in salaries paid from overseas (remittances might be included here).
- Gardia could have a (greater) deficit on its current transfers/transfer payments, eg in overseas aid or income remittances or pensions paid overseas.
NB Using examples is sufficient (though not required) but for [2] the examples must be from different accounts (bullet points).
NB A response that provides at least one account but does not refer to it having a (greater) deficit should be awarded [1].
Award [1] for each valid factor.
