Under the Simplifying Assumptions Made in the Text, a Current

question 40

Multiple Choice

Under the simplifying assumptions made in the text, a current account surplus exists when

• A) net exports are positive.
• B) net exports are negative.
• C) financial flows out of a country for goods and services exceeds financial flows into the country for its goods and services.
• D) imports exceed exports.

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Definitions:

Financial Liabilities

Obligations that require a company to pay money or deliver financial assets to another entity in the future.

Financial Guarantees Contracts

Contracts that require the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due.

Derivatives

Financial securities whose value is derived from the value of an underlying asset or benchmark.

AASB 9

The Australian Accounting Standards Board standard covering the classification, measurement, and recognition of financial assets and financial liabilities.