Tourism Boosts Current Account via Inflows

Steps:

• Foreign visitors spend money in Brazil, generating tourism receipts.
• These receipts count as service exports in the balance of payments.
• Exports increase the current account balance, reducing any deficit.
• Thus, the influx reduces Brazil's current account deficit.

Why D is correct:

• Tourism revenues are credits to the current account under IMF balance of payments standards, directly lowering the deficit.

Why the others are wrong:

• A: Capital inflows from spending appreciate, not depreciate, the currency.
• B: Visitor spending affects private economy, not government budget directly.
• C: While the balance improves, D precisely matches reducing a deficit scenario.

Final answer: D