A Balance of Payments Deficit Is Associated with a ________

question 43

Multiple Choice

A balance of payments deficit is associated with a ________ of international reserves,while a balance of payments surplus is associated with a ________.

• A)loss;loss
• B)loss;gain
• C)gain;loss
• D)gain;gain

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Definitions:

Carrying Costs

Expenses associated with holding inventory, including storage costs, insurance, and loss due to obsolescence.

Shortage Costs

Expenses incurred from inventory deficits, including lost sales and additional costs for expedited shipping.

Adjustment Costs

Expenses incurred in the process of modifying a business operation or strategy, including restructuring or equipment changes.

Transaction Motive

The need to hold cash for the purpose of conducting day-to-day business operations.