Which of the following would contribute to a Canadian balance of payments deficit?
A)Kawasaki builds a motorcycle manufacturing plant in Vancouver
B)Canadian tourists travel in large numbers to Europe
C)a wealthy Iranian builds a mansion in Montreal
D)Zaire pays interest on its debt to Canada

Question

Quizplus · Accepted Answer

Canadian tourists spending money in Europe would lead to a deficit in the balance of payments, as money is leaving the Canadian economy to be spent abroad. Choices A, C, and D would actually contribute to a surplus in the balance of payments, as they represent foreign investment in Canada or inflows of money from abroad.

Which of the Following Would Contribute to a Canadian Balance