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:

Marginal Resource Cost

The additional cost incurred by acquiring one more unit of a resource for production purposes.

Real Wage Growth

An increase in wage rates adjusted for inflation, indicating an increase in purchasing power and standard of living.

Capital Accumulation

The process of acquiring additional assets or capital goods aimed at increasing productive capacity or wealth.

Labor Productivity Growth

An increase in the output of goods and services per hour worked, which can lead to higher living standards and economic growth.