Question

Other things held constant, which of the following contributes to economic growth? a. Sales of stocks and bonds b. Accumulation of capital c. Higher population growth rate d. Higher current consumption of goods and services Which of the following is a debit item in the Australian current account? a. The fees paid by overseas students at an Australian university b. An Australian consulting company receives payment from an overseas firm c. The sale of wool to Italy d. An Australian company pays for consulting services from an overseas firm

Answer 1

(1) (b)

Accumulation of capital increases productive capacity, thus increasing economic growth.

(2) (d)

Since this represents an import of services (domestic currency going out), this is a debit entry.