Any Action That Gives Rise to a Demand for Foreign

question 125

Multiple Choice

Any action that gives rise to a demand for foreign currency is a

• A) deficit item on the current, financial or capital account.
• B) deficit item on the current account and a surplus item on the financial and capital accounts.
• C) surplus item on the current, financial or capital account.
• D) surplus item on the current account and a deficit item on the capital and financial accounts.

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Definitions:

Inflation

The rate at which the standard pricing for all goods and services moves upward, reducing the leverage of consumers to buy.

World Commodities

Raw materials or primary agricultural products that are traded on a global scale, which can include oil, gold, wheat, and coffee.

Price Level

The current mean value of prices for every good and service available in the economy.

Output

The total amount of goods or services produced by a person, machine, business, or country.