Suppose a Country's Official Reserves Do Not Change

question 121

Multiple Choice

Suppose a country's official reserves do not change.If it has a $20 billion deficit in its current account,then it must also have a $20 billion:

• A) surplus in its balance of payments.
• B) deficit in its balance of payments.
• C) surplus in its capital account.
• D) deficit in its capital account.

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Definitions:

Incidental Damages

Refers to compensation for additional unforeseen losses that result from a breach of contract.

Care and Custody

Care and custody refer to the responsibility and control over someone or something, particularly regarding the safety, well-being, and maintenance of that person or property.

Breach

The violation or failure to fulfill a duty, obligation, or promise, especially in terms of contract terms.

Warranty

A guarantee provided by the seller or manufacturer concerning the condition of its product, promising to repair or replace it if necessary within a certain period.