In a Floating Exchange Rate System, the Capital Account Balance

question 8

Multiple Choice

In a floating exchange rate system, the capital account balance equals

• A)The current account balance minus imports.
• B)Foreign purchases of U.S.assets plus U.S.purchases of foreign assets.
• C)The balance of payments plus the sum of the merchandise balance, the services balance, and unilateral transfers.
• D)The negative of the current account balance.

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Definitions:

Accounting Principle

Fundamental guidelines and rules that govern the accounting process and financial reporting of businesses.