Consider the Following Annual Transactions in Canada's Current Account

question 38

Multiple Choice

Consider the following annual transactions in Canada's current account.If Canadian exports of goods and services are $40 billion,imports of goods and services are $35 billion,transfers by Canadians to foreigners are $2 billion and transfers from foreigners to Canadian citizens are $1 billion,then the current account balance is

• A)+ $6 billion.
• B)+ $4 billion.
• C)- $4 billion.
• D)- $6 billion.
• E)- $7 billion

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Definitions:

Consumer Surplus

The gap between what consumers are prepared and can afford to pay for a product or service, and what they end up paying in reality.

Producer Surplus

The difference between the amount producers are willing to accept for a good versus what they actually receive.

Marginal Benefit

Marginal benefit is the additional satisfaction or utility received by consuming one more unit of a good or service.

Marginal Cost

The cost attached to the production of one additional unit of a good or service.