Consider the Balance of Payments for a Small Country

question 2

Multiple Choice

Consider the balance of payments for a small country.Suppose that in this country private saving is $4 million,its investment is $10 million,government purchases are $6 million,and net tax revenues are $15 million in a given year.The current account balance for this country is a

• A)deficit of $6 million.
• B)deficit of $9 million.
• C)surplus of $3 million.
• D)surplus of $9 million.
• E)surplus of $15 million.

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Definitions:

Equity Income

Income earned from investments in shares of companies, often received as dividends, indicating profit participation in these companies.

Internal Accounting Records

Documents and ledgers used within an organization to track financial transactions, operational data, and other key financial information.

Equity Method

An accounting technique used to record investments in other companies, where the investment is initially recorded at cost and subsequently adjusted to reflect the investor's share of the investee's net income or losses.

Equity Income

Income that comes from owning shares in a company, typically in the form of dividends paid out from the company's profits.