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Read the information below, supplied by the CSO and answer the questions which follow: | | Balance of Trade | Balance of Invisible Trade | |---|-------------------|--------------------------| | | €m | €m | | Quarter 2, 2012 | 10,004 | (6,769) deficit | | Quarter 2, 2011 | 9,660 | (9,192) deficit | (i) Explain the terms 'Balance of Trade' and 'Balance of Payments' - Leaving Cert Business - Question 3(A) - 2013
Question 3(A)
Read the information below, supplied by the CSO and answer the questions which follow: | | Balance of Trade | Balance of Invisible Trade | |---|-----------------... show full transcript
Worked Solution & Example Answer:Read the information below, supplied by the CSO and answer the questions which follow: | | Balance of Trade | Balance of Invisible Trade | |---|-------------------|--------------------------| | | €m | €m | | Quarter 2, 2012 | 10,004 | (6,769) deficit | | Quarter 2, 2011 | 9,660 | (9,192) deficit | (i) Explain the terms 'Balance of Trade' and 'Balance of Payments' - Leaving Cert Business - Question 3(A) - 2013
Step 1
Explain the terms 'Balance of Trade' and 'Balance of Payments'.
Answer
The Balance of Trade refers to the difference between visible exports and visible imports. Visible exports are goods produced domestically and sold abroad, while visible imports are goods produced abroad and purchased domestically.
The Balance of Payments includes both total exports (visible and invisible) and total imports (visible and invisible). It represents the total amount of money flowing in and out of a country within a specific period. A positive balance indicates a surplus while a negative balance indicates a deficit.
Step 2
Step 3
Illustrate what is meant by the term 'invisible exports' with reference to the Irish economy.
Answer
Invisible exports refer to services sold by Irish firms to foreign clients. An example includes the income generated from tourism, where foreign tourists visit Ireland and spend money on accommodations, meals, and attractions, which contributes positively to the economy without the exchange of physical goods.