A Nation's Annual Balance of Payments Statement Must Always Balance

question 246

Multiple Choice

A nation's annual balance of payments statement must always balance because

• A)a nation's imports are limited to the value of its exports.
• B)a nation's exports and imports are always paid with dollars.
• C)all international transactions must be settled in one way or another.
• D)a trade deficit must be matched by an equal surplus of investment income.

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Definitions:

Revenues And Expenses

Financial terms where revenues are the earnings from normal business operations and expenses are the costs incurred to earn these revenues.

Statement Of Cash Flows

A financial statement that summarizes the amount of cash and cash equivalents entering and leaving a company.

Operating Activities

Activities directly related to the day-to-day operations of a business, such as sales revenue, expense payments, and invoicing.

Income Activities

Activities that generate revenue for a business through its operations, sales, and other income sources.