In a Two-Period Example of Intertemporal Trade, If NX >

question 33

Multiple Choice

In a two-period example of intertemporal trade, if NX > 0 in period 1, then for trade to balance in period 2:

• A) C + I + G = Y
• B) NX < 0
• C) C + I + G > Y
• D) NX = 0
• E) Not enough information is given.

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Definitions:

Trial Balance

A trial balance is a bookkeeping report that lists the balances of all ledgers accounts in two columns, debits and credits, ensuring that total debits equal total credits.

Accounts Payable

Liabilities to creditors for goods or services that have been received but not yet paid for.

Credit

An accounting entry that increases liabilities or equity or decreases assets, representing a transfer of value in financial transactions.

Trial Balance

A bookkeeping report that lists the balances of all ledgers accounts to verify that total debits equal total credits.