Suppose That There Is a Current Account Deficit of $250

question 130

Multiple Choice

Suppose that there is a current account deficit of $250 billion and a capital account surplus of $260 billion. It may be concluded that the

• A)overall balance of payments is +10.
• B)overall balance of payments is -10.
• C)official reserve transaction account balance is +10.
• D)official reserve transaction account balance is -10.

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Definitions:

Law Of Demand

An economic principle stating that as the price of a good increases, demand for that good decreases, and vice versa, all else being equal.

Prices Fall

A market condition where the cost of goods and services decreases over time.

Ceteris Paribus

A Latin phrase meaning "all other things being equal," used in economics to isolate the effect of one variable on another by holding all other relevant factors constant in an analytical context.

Law Of Demand

The economic principle that states there is an inverse relationship between the price of a good or service and the quantity demanded, ceteris paribus.