Which of the Following Is Correct with Regard to the Balance

question 135

Short Answer

Which of the following is correct with regard to the balance of trade and the balance of payments?
If a country has a favourable balance of trade, it will also have a favourable balance of payments.
The balance of payments is computed by dividing the value of a country's currency by the number of currency transactions that took place in the previous year.
A country that imports more than it exports has a favourable balance of trade.
Countries used to strive to have a favourable balance of trade, but governments no longer worry about that issue because of globalization.
Canada has generally had a favourable balance of trade during the last few decades.

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Definitions:

Indirect Method

A method for preparing the cash flow statement where net income is adjusted for non-cash transactions, deferred income, and changes in working capital to compute net cash from operating activities.

Statement Of Cash Flows

A financial report summarizing the amount of cash and cash equivalents entering and leaving a company.

Book Value

The net value of a company's assets as recorded on its balance sheet, minus its liabilities and intangible assets, such as goodwill.

Indirect Method

A cash flow statement reporting approach that adjusts net income for changes in balance sheet accounts to calculate cash from operating activities.