If a Country Has a Flexible Exchange Rate System and a Deficit

question 11

Multiple Choice

If a country has a flexible exchange rate system and a deficit on current account

• A)the balance of payments must be zero.
• B)The balance of payments must be positive.
• C)The balance on capital account must be negative.
• D)The balance on capital account must be positive.

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Definitions:

Unrepresentative Sample

A subset of a population that does not accurately reflect the demographics or characteristics of the whole population, leading to biased results.

Loaded Question

A question that contains a controversial or unjustified assumption, often used to trap the respondent into a particular answer.

Correlations

Statistical measures that indicate the extent to which two or more variables fluctuate together.

Causal Relationship

A connection between two events where one is understood to be a direct result of the other.