If the Current Account Balance Is Negative, Net Interest Is

question 36

Multiple Choice

If the current account balance is negative, net interest is $100 billion and net transfers are -$100 billion, then

• A) imports exceed exports.
• B) the official settlements account must be negative.
• C) real GDP exceeds potential GDP.
• D) the official settlements account must be positive.
• E) exports exceed imports.

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Definitions:

Workers

Individuals or employees who perform tasks or labor for payment in various sectors of an economy.

Output

The volume of output in terms of products or services from a firm, industry, or the economy as a whole during a defined period.

Average Total Costs

The sum of all production costs divided by the quantity of output produced, representing the per-unit cost of production.

Average Variable Cost

The total variable costs (costs that change with output level) of production divided by the quantity of output produced.