Which of the Following Is TRUE

question 45

Multiple Choice

Which of the following is TRUE?

• A) A country with a current account surplus is earning more from its exports than it spends on imports.
• B) A country could finance a current account deficit by using previously accumulated foreign wealth to pay for its imports.
• C) A country with a current account deficit must be increasing its net foreign debts by the amount of the deficit.
• D) We can describe the current account surplus as the difference between income and absorption.
• E) All of the above are true of current account balances.

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Definitions:

Balance Sheet Approach

A method used in expatriate compensation that aims to equalize cost differences between the home country and the host country.

Compensating Expatriate Managers

The process of determining and providing adequate financial and non-financial benefits to managers who are temporarily assigned to work in foreign countries.

Financially

Pertaining to finance or finances, often used to describe actions or conditions relating to the management, investment, or allocation of money and assets.

Temporary Foreign Workers

Individuals from other countries who have been granted permission to work in a host country for a limited period of time, often to fill labor shortages.