The Balance of Payments Measures The

question 50

Multiple Choice

The balance of payments measures the:

• A) difference between government spending and tax receipts.
• B) difference between actual in?ation and the in?ation target in an economy.
• C) difference between the ?nancial ?ows coming in and going out of a country.
• D) relationship between the level of in?ation and the unemployment rate.

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Definitions:

Perpetuity

An infinite series of equal payments at equal intervals of time.

Present Value

The present-day value of a sum of money to be received in the future or a series of future cash flows, based on a certain return rate.

Cash Flow

A financial measurement that shows the net amount of cash and cash-equivalents being transferred into and out of a business over a specified period.

Annuity

A finite series of equal payments at equal intervals of time. In an ordinary annuity the payments occur at the ends of the time periods. In an annuity due, they occur at the beginnings.