Tourism boosts service exports in the current account

Steps:

• The current account tracks trade in goods, services, income, and transfers.
• Foreign visitors to the UK Olympics spend money on UK-provided services like accommodation, food, and events.
• This spending represents UK earnings from abroad, counting as an export.
• Exports improve the current account balance by increasing credits.

Why B is correct:

• By definition, tourism is an export of services, as foreigners pay for UK hospitality and entertainment, directly crediting the services balance per IMF balance of payments standards.

Why the others are wrong:

• A: Involves physical goods sold abroad, not visitor spending on experiences.
• C: UK imports of goods would increase if buying more from abroad, harming the balance.
• D: Refers to UK payments to foreigners for services, unrelated to inbound tourism.

Final answer: B