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.

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Definitions:

Groupthink

A mental effect experienced by a group, where the longing for agreement or compliance leads to illogical or ineffective decisions.

Illusion of Popularity

A perception phenomenon where individuals overestimate the extent to which they are liked or accepted by others.

Bad Apple

A term referring to an individual within a group or team who negatively influences the whole, often contributing to toxic environments or fostering negativity.

Groupthink

A phenomenon in group decision-making processes where the desire for harmony or conformity results in an irrational or dysfunctional outcome.