Category: The Balance of Payments

A. The overall sum of all the entries in the balance of payments must be positive
B. A country runs a current account surplus if it sells more of its assets abroad than it buys abroad
C. A country runs a capital account deficit if it imports more than it exports
D. If the current account is in surplus the capital account must be in deficit

A. If the current accounts is in surplus then the capital account must also be in surplus
B. If the current account is in deficit then the capital account must also be in deficit
C. The overall sum of all the entries in the balance of payments must be positive
D. The overall sum of all entries in the balance of payments must be zero

A. credit transactions
B. debit transactions
C. unilateral transfers
D. statistical discrepancy

A. involves receipts from foreigners
B. involves payments to foreigners
C. increases the domestic money supply
D. decreases the demand for foreign exchange

A. larger savings pool available to finance domestic spending
B. higher interest rate which leads to lower domestic investment
C. loss of funds to trading partners overseas
D. decrease in its services exports to other countries

A. capital outflow would cause the nation’s currency to depreciate contributing to a trade deficit
B. capital inflow would cause the nation’s currency to depreciate contributing to a trade deficit
C. capital inflow would cause the nation’s currency to appreciate contributing to a trade deficit
D. capital outflow would cause the nation’s currency to appreciate contributing to a trade deficit

A. trade deficit and an excess of investment over domestic saving
B. trade surplus and an excess of investment over domestic saving
C. trade deficits and an excess of domestic savings over investment
D. trade surpluses and an excess of domestic saving over investment

A. current account the capital account
B. current account the trade account
C. trade account the capital account
D. current account the reserve account

A. engage in more government spending
B. reduce government taxes
C. increases private investment spending
D. decrease domestic consumption

A. the country is a net lender to the rest of the world
B. the country is running a net capital account surplus
C. foreign investment in domestic securities is at very low levels
D. All of the above