Tourism boosts service exports

Steps:

• Current account tracks trade in goods/services, income, and transfers.
• Foreign visitors to UK Olympics spend money on UK accommodations, food, and events.
• These expenditures represent UK earnings from abroad, counting as exports.
• Specifically, tourism falls under service exports in the balance of payments.

Why B is correct:

• Export trade in services includes tourism receipts, as defined in IMF balance of payments manual, where foreign spending in the host country credits the current account.

Why the others are wrong:

• A: Involves physical goods sold abroad, not visitor spending on experiences.
• C: Represents UK purchases of foreign goods, worsening the current account.
• D: Covers UK consumption of foreign services, like outbound travel, not inbound visitors.

Final answer: B