If a Country Must Make a Net Payment to Foreigners

question 96

Multiple Choice

If a country must make a net payment to foreigners because of a balance-of-payments deficit, the country should

• A)either increase its official reserve assets or borrow anew from foreigners.
• B)either run down its official reserve assets or borrow anew from foreigners.
• C)either run down its official reserve assets or lend more foreigners.
• D)none of the above

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Definitions:

Decision Variables

Variables that decision-makers control in optimization problems, representing choices available to achieve the desired outcome.

Shadow Prices

Theoretical prices of resources in constraint optimization problems, representing the marginal value of an additional unit of a scarce resource.

Bird Houses

Structures designed and built specifically for birds to live in or use for nesting.