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Question 21N.3.HL.TZ0.3b

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Date November 2021 Marks available [Maximum mark: 1] Reference code 21N.3.HL.TZ0.3b
Level HL Paper 3 Time zone TZ0
Command term State Question number b Adapted from N/A
b.
[Maximum mark: 1]
21N.3.HL.TZ0.3b

Table 5 shows selected items of the balance of payments for Laylaland in 2020. Figures are in millions of US dollars (US$).

Table 5

(b)

State one example of a debit item from the financial account of the balance of payments.

[1]

Markscheme

Correct examples include:

  • (net) outward portfolio investment
  • (net) outward FDI
  • increase in forex reserves
  • (net) outflow of “hot money”.

OR examples of any of the above, such as:
Domestic residents purchasing foreign bonds / setting up a new company abroad or acquiring controlling percentage of shares of a foreign company / the central bank buying foreign currency / domestic residents buying foreign currency.

For any correct example award [1].

Examiners report

Many students did not know the items in the financial account of the balance of payments and instead stated a current account item. Others failed to show that FDI needed to be qualified as being “overseas” to be a debit item.

Syllabus sections