Suppose That the U

question 56

Multiple Choice

Suppose that the U.S.government acquires more foreign currency.How does this change affect the balance of payments accounts?

• A) The official settlements account balance is positive.
• B) The official settlements account balance is negative.
• C) The capital account is positive.
• D) The capital account is negative.
• E) The balance of payments account sum to a positive number equal to the value of the additional foreign currency the government has obtained.

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Definitions:

Income

The financial gain received by an individual or a business in exchange for providing goods, rendering services, or through investing capital.

Retained Earnings

The part of a company's net earnings not paid out as dividends but kept within the company.

Service Period

The duration for which a service is provided or expected to be provided, often used in the context of accounting for employee benefits or service contracts.

Compensation Cost

The total amount of monetary and non-monetary payments made to employees for their work or services.