The Current Account Increases When

question 2

Multiple Choice

The current account increases when

• A) real exchange rate decreases.
• B) real exchange rate increases.
• C) disposable income increases.
• D) exports fall.
• E) domestic prices fall.

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Definitions:

Accounting Period

A specific period of time used for financial accounting purposes, during which financial statements are prepared.

Cash Payments

Outflows of cash from a company to settle obligations or purchase goods and services.

Prepaid Insurance

An asset account that represents the amount paid for insurance contracts in advance for future coverage.

Insurance Expense

The cost associated with purchasing insurance coverage, recognized as an expense over the policy period.