When a Country Must Make a Net Payment to Foreigners

question 22

Multiple Choice

When a country must make a net payment to foreigners because of a balance-of-payments deficit,the central bank of the country

• A)should do nothing.
• B)should run down its official reserve assets (e.g.,gold,foreign exchanges,and SDRs).
• C)should borrow anew from foreign central banks.
• D)should either run down its official reserve assets (e.g.,gold,foreign exchanges,and SDRs)or borrow anew from foreign central banks.

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Definitions:

Unconscious Awareness

A state in which an individual is not fully aware of underlying thoughts, feelings, or desires that influence behavior, rooted in psychoanalytic theory.

Moral Anxiety

A feeling of discomfort or worry caused by conflict between one's actions and moral standards.

Superego

In psychoanalytic theory, the part of the personality that acts as a moral center, incorporating the values of society.

Superego

The part of a person's mind that acts as a self-critical conscience, reflecting social standards learned from parents and teachers.