The Sum of the Balances of the Three Accounts of the Balance

question 3

Multiple Choice

The sum of the balances of the three accounts of the balance of payments (the current account,the capital and financial account,and the reserve assets account) is

• A)negative if there is a balance of trade deficit.
• B)positive if there is a balance of trade surplus.
• C)equal to zero.
• D)negative if there is a balance of trade surplus or positive if there is a balance of trade deficit.
• E)positive if there is a balance of trade surplus or negative if there is a balance of trade deficit.

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Definitions:

Cash Flow Stream

A cash flow stream is a series of cash inflows and outflows over a period, often used in financial modeling to forecast or evaluate a project's viability.

Future Value

The estimated value of an investment or a sum of money at a specific date in the future, considering a specified rate of interest or growth.

Discount Rate

The rate at which future cash flows are discounted back to their present value in DCF analysis.

Grow

To increase in size, number, or importance over a period of time.