Which of the Following Is True Under a Pure Flexible

question 11

Multiple Choice

Which of the following is true under a pure flexible exchange rate regime?

• A) Balance of current account - Balance of capital account > 0
• B) Balance of current account + Balance of capital account < 0
• C) Balance of current account + Balance of capital account = 0
• D) Balance of current account - Balance of capital account = 0x

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Definitions:

Interest Rate

The cost of borrowing money or the return for investing money, usually expressed as a percentage of the principal amount annually.

Import Quota

A government-imposed limit on the quantity or value of goods that can be imported into a country.

U.S. Imports

Goods and services purchased by residents of the United States from foreign firms and brought into the U.S.

U.S. Exports

Goods, services, and capital sent from the United States to other countries.