Deficits and Surpluses in the Balance of Payments Are Eliminated

question 5

Multiple Choice

Deficits and surpluses in the balance of payments are eliminated by ____ in a pure flexible exchange rate system.

• A)​the market mechanism
• B)​financial borrowings
• C)​reserve movements
• D)​changes in fiscal and monetary policies

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Definitions:

Cash Dividends

Payments made by a corporation to its shareholder members out of its earnings. It represents a share of corporate profits.

Property, Plant, Equipment

Long-term tangible assets used in the operation of a business and not intended for resale.

Operating Activities

Operating activities relate to the primary business activities of a company, such as production, distribution, and marketing, which generate revenue and expenses reflected in the income statement.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including material, labor, and overhead costs.