A Deficit on the Current Account

question 67

Multiple Choice

A deficit on the current account:

• A)normally causes a surplus on the capital account.
• B)normally causes a deficit on the capital account.
• C)has no relationship to the capital account.
• D)means that a nation is not making any international transfers.

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Definitions:

Interest Expense

Financial obligations an entity must fulfill for using borrowed money over time.

Issued

Refers to the process whereby a company distributes shares to shareholders, which can include both the initial offering to the public and subsequent offerings.

Premium

An additional amount paid over the normal cost, often associated with insurance or bonds.

Discount

In finance, this is the reduction from the face value of a note, bond, or other financial instrument; in commerce, it refers to a reduction from the regular price.