Use the Following Terms for This Question

question 24

Multiple Choice

Use the following terms for this question:
(X-M) = Current Account Balance
(CI-CO) = Capital Account Balance
(FI-FO) = Financial Account Balance
(I-S) = Investment-Saving Balance
FXB = Reserve Balance
BOP = balance of payments
GDP = gross domestic product
C = consumption
I = capital investment spending
G = government spending
The static equation for the BOP is:

• A) BOP = (X-M) - (CI-CO) - (FI-FO) + FXB
• B) BOP = (X-M) + (I-S) + (FI-FO) + FXB
• C) BOP = (X-M) + (CI-CO) + (FI-FO) + FXB
• D) BOP = GDP - [C + I +G] + (FI-FO)

---

Definitions:

Unspecified Labor

Work or labor contributions that are not clearly defined or categorized within a project or operational activity.

Direct Labor

The labor costs directly tied to the production of goods or provision of services, such as wages of workers on the manufacturing line.

Period Costs

Expenses that are not directly tied to production activities and are instead charged to the periods in which they occur, such as selling, general, and administrative expenses.

Income Statement

A financial statement that reports a company's financial performance over a specific period, showing revenue, expenses, and net income.