If US Imports Increase, the Sum of the Balance of Payments

question 263

Multiple Choice

If U.S. imports increase, the sum of the balance of payments accounts (the sum of the current account plus capital account plus official settlements account)

• A) does not change.
• B) becomes negative.
• C) becomes positive.
• D) becomes negative or positive depending on the government budget deficit or surplus.

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Definitions:

Variable Expenses

Costs that change in proportion to the level of activity within a business.

Contribution Margin

The amount by which the sales revenue of a product exceeds its variable costs, indicating how much contributes towards covering fixed costs and generating profit.

Break-Even Point

The point at which total costs and total revenues are equal, resulting in no net gain or loss for the business.

Fixed Costs

Costs that do not change with the level of production or sales, such as rent, salaries, and insurance premiums, providing stability to a company's expenses.