Which of the following would be directly affected by changes in the amount of foreign aid Canada provides to developing nations?
A) Canada's balance of trade, but not its balance of payments
B) neither Canada's balance of payments nor its balance of trade
C) both Canada's balance of payments and its balance of trade
D) Canada's balance of payments, but not its balance of trade

Question

Quizplus · Accepted Answer

Foreign aid from Canada to developing nations is recorded in the current account of the balance of payments as a transfer, not affecting the balance of trade, which records exports and imports of goods and services.

Which of the Following Would Be Directly Affected by Changes