When There Is Political Instability in Another Country, the United

question 8

Multiple Choice

When there is political instability in another country, the United States can expect

• A)an increase in the capital account balance due to an increase in the current account.
• B)an increase in the capital account balance due to the movement of assets to the U.S.
• C)a decrease in the balance of payments due to a decrease in special drawing rights.
• D)a decrease in the balance of payments due to a decrease in the demand for goods and services.

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Definitions:

Risk and Uncertainty

Refers to situations where the outcomes or consequences of actions are unknown, with risk implying some knowledge of probability and uncertainty indicating a complete lack of predictability.

Personal Judgments

Opinions or decisions formed by individuals based on personal feelings, tastes, or opinions, often without external input or influence.

Certainty

The state of being confident and free from doubt about something, often implying a high degree of belief in the accuracy or truth of an outcome or fact.

Fully Informed

Being fully informed means having all the necessary and relevant information or knowledge about a particular subject or situation before making decisions.