A Current Account Surplus Is Generally a Result Of

question 225

Multiple Choice

A current account surplus is generally a result of:

• A) imports exceeding exports.
• B) sales of stock in U.S. companies to citizens of foreign countries.
• C) a large influx of foreign investment income.
• D) exports exceeding imports.

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Definitions:

Federal Reserve

The central banking system of the United States, responsible for monetary policy, including regulating banks, managing inflation, and influencing interest rates.

Federal Open Market Committee

The branch of the Federal Reserve System responsible for overseeing the nation's open market operations and making key decisions about interest rates and the growth of the United States money supply.

Discount Rate

The interest rate charged by central banks on loans and advances to commercial banks and other financial institutions.

Reserve Requirements

Reserve requirements are central bank regulations that set the minimum amount of reserves that commercial banks must hold, either in their vaults or deposited with the central bank, as a percentage of their deposit liabilities.