The Current Account Balance Consists of Exports, Minus Imports of Merchandise

question 18

True/False

The current account balance consists of exports, minus imports of merchandise and services, plus income on US assets abroad, minus payments on foreign assets in the United States, plus unilateral government transfers and private remittances.

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Definitions:

Recessions

A temporary downturn in the economy marked by decreased trade and industrial activities, typically recognized by a decline in Gross Domestic Product (GDP) for two consecutive quarters.

Keynesian Analysis

An economic approach that emphasizes the role government can play in smoothing out the fluctuations in the economy through fiscal and monetary policy.

Macroeconomic Equilibrium

A state in which aggregate supply equals aggregate demand, meaning all goods and services produced are purchased, without any involuntary inventory buildup.

Aggregate Demand

The total demand for all goods and services within a particular market.