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Difficulty: EasyTourism and Its Contributions to Trade

Revenue earned by a country from foreign tourists visiting its local attraction sites and using hospitality services is classified as an invisible export in trade accounts.

Answer: Answer

Answer

True. Revenue generated from international visitors paying for local services and tourist attractions is classified as an invisible export because it brings in foreign currency through service provision rather than physical merchandise trade.
The statement is true because foreign tourism represents an invisible export. When foreign tourists consume services within a host nation, foreign exchange flows into the country without physical goods leaving its borders.

Step-by-Step Solution

1
Determine the nature of tourism service transactions
Tourism is an auxiliary to trade that provides services such as accommodation, transportation, and entertainment to visitors.
Tourism generates economic output through intangible services rather than manufacturing physical goods.
2
Classify international tourist spending in international trade accounts
Spending by foreign tourists represents foreign exchange inflow derived from service consumption.
When non-residents consume services within the host country, foreign exchange is gained just like exporting merchandise, but because no physical goods cross borders, it is categorized as an invisible export.

Key Concept

Classification of tourism as an invisible export in trade
Estimated Time:45s
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Topics

Tourism and Its Contributions to Trade

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