The Current Account Balance Plus Net Capital Inflows Equals

question 247

Multiple Choice

The current account balance plus net capital inflows equals

• A) net capital outflows.
• B) the international trade gap.
• C) the expansionary gap.
• D) the recessionary gap.
• E) zero.

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Definitions:

Long-Run Equilibrium

A state in which all firms in a market are making just enough profit to stay in business, with no incentive for new firms to enter or existing firms to exit.

Price Taker

A market participant that accepts the market price as given and has no influence to alter the price of the good or service they buy or sell.

Price-Searcher Market

A market structure where sellers have some control over the price of their products because they offer unique goods or services, differentiating them from competitors.

Economic Profit

The surplus or profit generated by a company after accounting for both explicit and implicit costs, indicating financial performance.