If a Country Runs a Deficit on Its Balance of Payments

question 283

Multiple Choice

If a country runs a deficit on its balance of payments for goods and services, to pay for its imports, it must:

• A) raise taxes.
• B) print new money.
• C) sell assets to foreigners.
• D) decrease its exports.

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Definitions:

Paid-In Capital

The amount of capital provided by shareholders to a company in exchange for shares of stock, representing the funds contributed by investors during the issuance of shares.

Stockholders' Equity

Stockholders' Equity represents the owners' claim after all liabilities have been deducted from total assets. It's also known as shareholders' equity or equity.

Par Value

A nominal or face value assigned to a share of stock by the company's charter, unrelated to the market value.

Paid-In Capital

The amount of money that a company has received from shareholders in exchange for stock, exceeding the par value of the shares.