A group of Japanese tourists visits Banff National Park in Alberta and spends $20,000 on goods and services in Canada.This will
A)reduce the Canadian current account by $20,000.
B)increase the Canadian current account by $20,000.
C)have no change in the Canadian current account.
D)increase Canadian imports.

Question

Quizplus · Accepted Answer

The Japanese tourists' expenditure in Banff National Park represents an inflow of foreign currency into Canada, thus increasing the Canadian current account by $20,000. The current account measures a country's trade in products and services with foreign countries, including exports and imports, as well as income receipts and payments. Therefore, this transaction represents an increase in Canadian exports of tourism services.

A Group of Japanese Tourists Visits Banff National Park in Alberta