If the Current Account Is in Surplus and the Capital

question 269

Multiple Choice

If the current account is in surplus and the capital account is zero,then

• A)the financial account must be in deficit.
• B)the balance of trade must be in deficit.
• C)the balance of payments must be in deficit.
• D)there is a capital inflow.
• E)the balance of services must be in deficit.

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Definitions:

Market Economy

An economic system where the allocation of resources is determined by supply and demand in the market rather than by a central plan.

Unemployment

The situation in which people who are able and willing to work cannot find a job.

Real Output

The production of goods and services in an economy adjusted for inflation, allowing for comparison of economic productivity over different time periods by reflecting the actual volume of production.

Price Levels

The general level of prices for goods and services in an economy at a specific point in time.