The Table Given Below Reports the Value of Various International

question 13

Multiple Choice

The table given below reports the value of various international transactions in Germany for the year 2011. The negative sign denotes the outflow of euros from Germany.
Table 6.1
$\begin{array}{|l|c|}\hline \text { German 2010 Transactions } & \text { Millions of Euros } \\\hline \text { Capital Inflows } & € 1,420 \\\hline \text { Exports of Goods } & € 750 \\\hline \text { Imports of Services } & -€ 430 \\\hline \text { Investment Income Receipts } & € 400 \\\hline \text { Investment Income Payments } & € 670 \\\hline \text { Unilateral Transfers } & -€ 470 \\\hline \text { Exports of Services } & € 340 \\\hline \text { Imports of Goods } & -€ 790 \\\hline \text { Capital Outflows } & -€ 920 \\\hline\end{array}$
-Refer to Table 6.1. Compute the capital account balance for Germany.

• A) -€430
• B) -€800
• C) €180
• D) €500
• E) -€550

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Definitions:

Diminishing Marginal Utility

The decrease in satisfaction or usefulness obtained from each additional unit of consumption.

Inferior Good

A type of good for which demand decreases as the income of the consumer increases, due to the availability of more desirable substitutes.

Diminishing Marginal Utility

The principle that as a person consumes more of a good, the satisfaction gained from consuming an additional unit decreases.

Comparative Advantage

The ability to produce a good at a lower opportunity cost than others can produce it. Relative costs determine comparative advantage.