Which one of the following will directly affect Canada's balance on goods and services, but not affect its balance of trade?
A)an increase in merchandise exports
B)a decrease in exports of services
C)an increase in official reserves
D)an increase in net transfers

Question

Quizplus · Accepted Answer

Balance of trade only focuses on goods, while balance on goods and services includes both merchandise and services. Therefore, a decrease in exports of services would affect Canada's balance on goods and services, but not its balance of trade. An increase in merchandise exports would affect both balances. An increase in official reserves and net transfers would affect Canada's balance of payments, which includes both the balance on goods and services and the capital account.

Which One of the Following Will Directly Affect Canada's Balance