The Balance of Payments Has to Be Shown with a Balancing

question 69

Multiple Choice

The balance of payments has to be shown with a balancing item because:

• A) foreign portfolio investment usually goes unrecorded.
• B) illegal transactions in the international trade market are not recorded.
• C) under a dirty float, the balance of payments is zero.
• D) under a fixed exchange rate regime, the balance of payments is zero.

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Definitions:

U.K.'s Laws

The legal rules and regulations that are governing within the United Kingdom, encompassing statutes, common law, and legal precedents.

Principle of Comity

A legal doctrine that suggests courts within one jurisdiction will give effect to the laws and judicial decisions of another jurisdiction, based on mutual respect rather than obligation.

Agency Relationships

A legal relationship in which one party (the agent) acts on behalf of another party (the principal) in a business transaction.

Act of State Doctrine

A principle in international law that a nation is sovereign within its own borders and its domestic actions may not be questioned in the courts of another nation.