A Country Runs a Deficit in Its Current Account If

question 116

Multiple Choice

A country runs a deficit in its current account if:

• A)it consumes less goods and services compared to what it produces.
• B)the interest and dividends earned by its residents on foreign assets exceed the interest and dividends earned by foreigners who invest in domestic assets.
• C)it follows the double-entry bookkeeping requirement that total debits must equal total credits.
• D)foreign currency received from exports and transfers exceeds the foreign exchange needed to pay for imports and to make unilateral transfers.
• E)foreign currency received from exports and transfers is less than the foreign exchange needed to pay for imports and to make unilateral transfers.

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Definitions:

Optimal Bundle

The combination of goods and/or services that maximizes a consumer's satisfaction or utility, given their budget constraint.

Original Prices

The initial cost of goods or services before any discounts, promotions, or changes.

Bureau of Fisheries

A government agency responsible for the regulation and oversight of fishing activities, management of fish populations, and conservation of aquatic habitats.

Fishing License

A regulatory or legal authorization required to fish in certain areas, used to manage and conserve fish stocks and control fishing practices.