Identify and Distinguish Among, in Balance-Of-Payments Accounting, Various "Balances"that Can

question 11

Essay

Identify and distinguish among, in balance-of-payments accounting, various "balances"that can appear in a country's balance-of-payments statement. What must conceptually be the numerical relationship between a country's "balance on current account" (or "current account balance") and its "capital/financial account balance?" Why? Then, for each of the two
statements below, explain why the statement is either True or False.
(a) "A rise in interest rates in a country, such as occurred in the United States
in the early 1980s, can lead to an increased deficit in the country's merchandise trade balance."
(b) "A decrease in saving by households in a country can lead to a deterioration in that country's balance on current account (i.e., can make the current account balance less positive or more negative)."

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Definitions:

Frontal Plane

An anatomical division of the body into front and back halves that allows for the analysis of movement and posture.

Medial

Pertaining to or located towards the midline of the body or an organ.

Anatomical Position

A standard posture in which an individual stands upright with arms at the sides and palms facing forward, used as a reference in describing the relation of body parts to one another.

Thumbs

The first digit on each hand, highly mobile and capable of opposition to the other fingers, allowing for grasping and manipulating objects.