If There Is a Small Surplus in the Combined Current

question 147

Multiple Choice

If there is a small surplus in the combined current account plus capital and financial account for a certain year, then to make the two accounts balance, there will be

• A) an increase in the exchange rate.
• B) a decrease in the exchange rate.
• C) an increase in official reserve holdings.
• D) a decrease in official reserve holdings.

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Definitions:

Degrees of Freedom

The quantity of distinct variables or measures that may fluctuate during an evaluation without breaching any restrictions.

Test Statistic

A calculated value used to determine whether to reject the null hypothesis in statistical hypothesis testing.

Critical Value

A point on the scale of a test statistic beyond which we reject the null hypothesis; it depends on the chosen significance level.

Test Statistic

A value calculated from sample data during a hypothesis test.