Which of the Following Statements About the Balance of Payments

question 492

Multiple Choice

Which of the following statements about the balance of payments accounts is correct?

• A) The official settlements account is typically larger than both the capital and current accounts.
• B) The current account must be greater than the capital account.
• C) Typically the capital account is near zero because it equals the difference between the current account and the official settlements account.
• D) The sum of all three accounts is always zero.

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Definitions:

Price Cutting

A strategy where a company reduces the prices of its goods or services, often to attract more customers or compete with rivals.

Product Class

A broad category of products that serve a similar function or are marketed in a similar manner but vary in features, quality, and price.

Product Line

A group of related products under a single brand offered by a company, catering to varied customer needs or preferences.

Yield Management Pricing

A pricing strategy that uses demand forecasting and flexibility in pricing to maximize revenue, often used in the hospitality and airline industries.