When Comparing a Nation's Balance of Trade with Its Balance

question 35

Multiple Choice

When comparing a nation's balance of trade with its balance of payments,which statement is true?

• A)The two concepts should yield the same value, because the value of goods traded must equal the total payments made to buy those goods.
• B)The balance of payments includes the balance of trade, but it also includes other financial flows such as foreign borrowing and lending.
• C)The balance of trade includes exports and imports only of goods, while the balance of payments includes exports and imports of both goods and services.
• D)These two concepts are totally unrelated, so comparing them is not really meaningful.

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Definitions:

Disaffirmance Laws

Legal provisions that allow minors to cancel or void certain contracts they have entered under specific circumstances, to protect them from exploitation.

Discouraging Adults

Measures or strategies aimed at dissuading adult behavior deemed negative or harmful.

Age Of Majority

The threshold of adulthood as recognized by law, typically 18 years old in many countries, marking the point at which a person is legally considered an adult.

Right To Contract

The legal ability of an individual or entity to enter into binding agreements.