If a Country Had a Trade Deficit of $20 Billion

question 61

Multiple Choice

If a country had a trade deficit of $20 billion and then its exports rose by $7 billion and its imports fell by $10 billion,its net exports would now be

• A)$37 billion
• B)$3 billion
• C)-$3 billion
• D)-$37 billion

Discriminate between different types of risk premiums (default, maturity, liquidity) and their impact on interest rates.

Recognize the theories explaining the term structure of interest rates (expectations theory, liquidity preference theory, market segmentation theory).

Calculate the impact of inflation on interest rates and understand inflation adjustment in interest rate calculations.

Understand how the financial markets facilitate the flow of money between the consumption and production sectors.

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Definitions:

Option Rights

Entitlements that grant the holder the right, but not the obligation, to buy or sell a particular asset at a predetermined price within a specified timeframe.

Rights

Rights refer to the moral or legal entitlements to have or do something, recognized in society as fundamental to human welfare or justice.

Ethical

Pertaining to or dealing with morals, principles of morality and judgments of right and wrong behavior.

Welfare

relates to the health, prosperity, and happiness of individuals or communities, often considered in the context of social support and services.