Which of the Following Identities Regarding the Balance of Payments

question 11

Multiple Choice

Which of the following identities regarding the balance of payments must be true?

• A) Current-Account Balance + Capital Account Balance + Official Reserve Balance = 0
• B) Current-Account Balance + Capital Account Balance + Official Reserve Balance = 1
• C) Current-Account Balance + Capital Account Balance + Merchandise Imports = 0
• D) Current-Account Balance + Capital Account Balance + Net Financial Inflow = 0

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Definitions:

Handwriting

The act or process of writing by hand, including the style and manner in which a person writes.

Merchants

Individuals or entities engaged in the sale of goods and services, often within specific sectors or industries, playing a crucial role in the economy.

Negotiable Instrument

A formal written commitment to pay a particular amount of money, either when asked or at an agreed-upon time, with the individual who will make the payment specified in the document.

Enforceable Assignment

A transfer of rights or property that is valid under law, allowing the assignee to enforce the assignment against the assignor and possibly against third parties.