Under a Floating Exchange Rate System with Mobile International Capital

question 114

Multiple Choice

Under a floating exchange rate system with mobile international capital, it is always true that current account

• A)deficit + capital account surplus = trade deficit.
• B)surplus − capital account surplus = trade deficit.
• C)surplus + capital account deficit = 0.
• D)surplus − capital account surplus = 0.

---

Definitions:

Synthetic Theory

Also known as the modern synthesis, it combines Darwin's theory of evolution with Mendelian genetics, explaining evolution as changes in gene frequencies within populations.

Evolution

The mechanism by which diverse living entities are considered to have emerged and spread from their predecessors over the course of earthly history.

Genetic Changes

Alterations in the DNA sequence of an organism, which can be due to mutations, gene flow, genetic drift, or natural selection.

Vertebrates

A subphylum of chordates that includes fishes, amphibians, reptiles, birds, and mammals; possess a bony vertebral column.