Which of the Following Statements Is Incorrect for an Open

question 38

Multiple Choice

Which of the following statements is incorrect for an open economy?

• A)A country can have a trade deficit, trade surplus, or balanced trade.
• B)A country that has a trade deficit has positive net capital outflow.
• C)Net exports must equal net capital outflow.
• D)National saving must equal domestic investment plus net capital outflow.

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Definitions:

Deferred Tax Liabilities

Future tax obligations that arise due to temporary differences between the book value and tax value of assets and liabilities.

Deferred Tax Assets

Financial items on the balance sheet representing taxes paid or carried forward but not yet realized on the income statement.

Permanent Difference

A discrepancy between the tax treatment and accounting treatment of transactions and events that will not reverse in the future.

IFRS Rules

A specific set of standards and guidelines established under the IFRS framework for financial reporting and accounting.