In the Balance of Payments, If There Are No Statistical

question 202

Multiple Choice

In the balance of payments, if there are no statistical errors or discrepancies, which of the following is true of the sum of the capital account balance, the current account balance, and the official reserve transactions account balance?

• A) This sum is either positive or negative, depending on whether the sum of all surplus and deficit items associated with cross-border transactions is positive or negative.
• B) This sum must always be zero, because the sum of all surplus and deficit items associated with cross-border transactions must equal zero.
• C) This sum is positive only if the U.S. government operates with a budget surplus.
• D) This sum is positive only if the U.S. government operates with a budget deficit.

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Definitions:

Revenue Tariff

A duty imposed on imported goods primarily to generate income for the government rather than to restrict imports or protect domestic industries.

Venetian Glass

A type of glass made in Venice, Italy, renowned for its craftsmanship, color, and intricate designs.

Service Tax

A tax levied by the government on service providers on certain service transactions, but is actually borne by the customers.

Quotas

Limits set by governments on the amount of a specific good that can be imported or exported during a given time frame, often used as a way to regulate international trade.