A Freely Floating Exchange Rate System, If the Capital Account

question 13

Multiple Choice

a freely floating exchange rate system, if the capital account is running a deficit

• A) the balance of payments must run a deficit
• B) the balance of payments must be a deficit
• C) the current account must run a deficit
• D) the current account must run a surplus

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Definitions:

Administrative Expenses

Expenses incurred that are not directly tied to a specific function like manufacturing, production, or sales, usually including items like rent, utilities, and management salaries.

Operating Expenses

Costs associated with the day-to-day operations of a business, such as rent, utilities, salaries, and maintenance, but not including cost of goods sold.

Adjusting Entries

Accounting records created at the close of a fiscal period to distribute revenues and expenses to the timeframe they genuinely transpired.

Reversed

In accounting, referring to the action of negating a previous transaction or entry to correct or adjust financial records.