Use the Following Terms for This Question

question 24

Multiple Choice

Use the following terms for this question:
(X-M) = Current Account Balance
(CI-CO) = Capital Account Balance
(FI-FO) = Financial Account Balance
(I-S) = Investment-Saving Balance
FXB = Reserve Balance
BOP = balance of payments
GDP = gross domestic product
C = consumption
I = capital investment spending
G = government spending
The static equation for the BOP is:

• A) BOP = (X-M) - (CI-CO) - (FI-FO) + FXB
• B) BOP = (X-M) + (I-S) + (FI-FO) + FXB
• C) BOP = (X-M) + (CI-CO) + (FI-FO) + FXB
• D) BOP = GDP - [C + I +G] + (FI-FO)

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Definitions:

Northern Europe

A geographical region in Europe, typically including countries such as Denmark, Finland, Iceland, Norway, Sweden, and sometimes the British Isles, known for its cold climate and advanced social welfare systems.

Coal Deposits

Geological formations containing coal in significant quantities, which can be mined for fuel and other uses.

Foreign Source

Originating from a country or place other than one's own; in information or materials context, it refers to sources from outside the domestic or local scope.

Capital

Financial assets or the financial value of assets, such as cash and buildings, used by a business to produce goods or services.