Under a System of Flexible Exchange Rates, in the Long

question 60

Multiple Choice

Under a system of flexible exchange rates, in the long run, a nation's balance on current account and capital account transactions will

• A) increase continuously.
• B) decrease continuously.
• C) tend to net out to zero, indicating a balance between the debits and credits.
• D) tend to increase if the nation is running a balance of trade surplus and decrease if it is running a balance of trade deficit.

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Definitions:

Hairs

Filamentous biomaterials growing from the dermis of mammals, serving various functions including temperature regulation and sensation.

Placenta

An organ in mammals that develops during pregnancy, providing oxygen and nutrients to the fetus while removing waste products.

Fetal Membranes

The membranes that surround the developing fetus in the womb, including the amnion, chorion, and others, providing protection, nourishment, and waste removal.

Maternal Tissue

The tissue derived from the mother, particularly significant in plants and animals for providing nutrients to the offspring or embryo.