The Primary Component of the Current Account Is The

question 7

Multiple Choice

The primary component of the current account is the:

• A) balance of trade.
• B) balance of money market flows.
• C) balance of capital market flows.
• D) unilateral transfers.

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Definitions:

Prompt Payment Discount

A discount offered by sellers to buyers for paying their invoices early.

Liable

Legally responsible or obligated.

Compensating Balance

A compensating balance is a minimum account balance that a borrower must maintain with a lender as part of the loan agreement.

Effective Interest Rate

The real rate of interest earned or paid on an investment or loan, taking into account the effect of compounding.