If the Current Account Has a Positive Balance of $100

question 112

Multiple Choice

If the current account has a positive balance of $100 and the capital account has a negative balance of $90, there will be _ _ in official reserves of _ _.

• A) an increase; $10
• B) a decrease; $190
• C) a decrease; $10
• D) an increase; $190

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Definitions:

Operate

To control the functioning of a machine, process, or system.

Decreasing-Cost Industry

An industry where input costs tend to fall as the industry as a whole expands its output.

LRAC Curve

The Long Run Average Cost curve shows the lowest possible average cost of production at different levels of output when all inputs are variable.

Entry

The act or process of entering into a market as a new supplier or producer, often facing barriers such as high startup costs or regulations.