If Econia Decreases Its Imports, Which of the Following Will

question 13

Multiple Choice

If Econia decreases its imports, which of the following will happen to its current account balance?

• A) The smaller inflow of funds will lower the balance.
• B) The smaller outflow of goods will lower the balance.
• C) The smaller outflow of funds will raise the balance.
• D) The smaller inflow of goods will raise the balance.

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Definitions:

Normal Balance

The side of an account, whether debit or credit, where increases in the account are recorded, determined by the account's classification in the accounting equation.

Capital Account

A national account that shows the net change in asset ownership for a country.

Revenue Account

An account that tracks the income earned from a company's primary operations.

Liability Account

An accounting record that captures the amount a company owes to others, such as loans, accounts payable, or mortgages.