If a French Company Exports $2 Million of Machinery to Italy

question 15

Multiple Choice

If a French company exports $2 million of machinery to Italy and French tourists spend $2 million at Italian beaches,the Italian current account balance ________,and the Italian financial account balance ________.

• A)rises; rises
• B)rises; is unchanged
• C)is unchanged; is unchanged
• D)is unchanged; rises

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Definitions:

Education

The systematic process of facilitating learning, acquiring knowledge, skills, values, beliefs, and habits.

Personal Income

The total annual income received by an individual, including wages, dividends, interest, and any other sources of income before taxes.

Purchases

Purchases are transactions where goods or services are bought in exchange for money, contributing to consumer spending and economic activity.

Services

Economic activities that provide intangible products, such as healthcare, entertainment, and financial services, to consumers.