A System of Accounts That Measures the Transactions of Goods

question 19

Multiple Choice

A system of accounts that measures the transactions of goods, services, income, and financial assets between domestic households, businesses, and governments and residents of the rest of the world during a specific time period is the

• A) capital account.
• B) current account.
• C) balance of payments.
• D) balance of trade.

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Definitions:

Inferior Good

A product whose demand decreases as consumers' income levels increase, opposite to normal goods.

Income Rises

An increase in the amount of money received by individuals or households, often measured on an annual basis.

Complementary Goods

Products or services that are often used together, where the increase in demand for one leads to an increase in demand for the other.

Market Demand

The total quantity of a good or service that all consumers are willing to purchase at a given price over a specified period.