Every International Transaction Automatically Enters the Balance of Payments

question 64

Multiple Choice

Every international transaction automatically enters the balance of payments

• A) once either as a credit or as a debit.
• B) twice, once as a credit and once as a debit.
• C) once as a credit.
• D) twice, both times as debit.
• E) three times, once as a credit, once as a debit, and once as an exchange.

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Definitions:

Annual Interest Payment

The total amount of interest to be paid each year on a loan, bond, or other financial instrument.

Straight-line Method

A depreciation method that allocates an equal portion of the initial cost of an asset to each year of its useful life.

Present Value

The current value of a future sum of money or stream of cash flows given a specified rate of return, accounting for time value of money.

Compounded Annually

A method of calculating interest where the interest is added to the principal at the end of each year, and the following year's interest is calculated on the total amount.