According to the Monetary Approach to the Balance of Payments,a

question 15

Multiple Choice

According to the monetary approach to the balance of payments,a deficit in the nation's balance of payments results from:

• A)an excess in the nation's stock of money supply that is not eliminated or corrected by the nation's monetary authorities
• B)an excess in the stock of money demanded in the nation that is not satisfied by domestic monetary authorities
• C)an excess in the stock of money demanded in the other nation that is not satisfied by the other nation's monetary authorities
• D)an excess of imports over exports in the nation

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Definitions:

Investing Activity

Financial transactions involving the purchase and sale of long-term assets and investments.

Loan Collection

The process of obtaining payment from borrowers on outstanding loans.

Operating Activities

The day-to-day tasks and transactions related to the primary operations of a business, typically reflected in the cash flow statement.

Cash Payments

Outflows of cash to settle obligations or purchase goods and services, including paying bills, salaries, and other expenses.