Suppose That There Is a Current Account Deficit of $255

question 297

Multiple Choice

Suppose that there is a current account deficit of $255 billion and a capital account surplus of $245 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:

Leg Warmers

Clothing accessories worn on the lower legs, originally used by dancers to keep muscles warm and prevent cramping or other injuries.

Short-Lived

Describing an event, phenomenon, or object that exists or lasts for a brief period of time.

Enthusiasm

A feeling of energetic interest in a particular subject or activity and an eagerness to be involved in it.

Social Dilemma

A situation in which behavior that is rational for the individual can, when practiced by many people, lead to collective disaster.