In the Balance of Payments,the Statistical Discrepancy Is Used To

question 40

Multiple Choice

In the balance of payments,the statistical discrepancy is used to:

• A)Ensure that the sum of all debits matches the sum of all credits
• B)Ensure that trade imports equal trade exports
• C)Obtain an accurate account of the trade deficit
• D)Obtain an accurate account of the balance of payments deficit

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Definitions:

Profitability Index

A financial metric used to evaluate the desirability of an investment, calculated as the present value of future cash flows divided by the initial investment.

Payback Period

The duration required for an investment to generate cash flows sufficient to recover its initial cost.

AAR

Average Annual Return, which measures the average return generated by an investment per year over a specified period.

NPV

Net Present Value; a method used in capital budgeting to evaluate the profitability of an investment, calculating the difference between the present value of cash inflows and outflows.