A Decrease in Capital Flows into a Country, Holding Everything

question 363

Multiple Choice

A decrease in capital flows into a country, holding everything else constant, will:

• A)increase its current account.
• B)be recorded as an increase in its balance of financial account.
• C)decrease the balance of payments on the current account.
• D)make the balance of payments negative.

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Definitions:

Socially Desirable

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Payoff Matrix

A table that shows the potential outcomes (or payoffs) for different actions taken by players in a strategic game, outlining the results for each combination of choices.

Dominant Strategy

A strategy in game theory that results in the best outcome for a player, regardless of the strategies chosen by other players.

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