Scenario 4-1 In a Given Year, Country a Exported $12 Million Worth

question 3

Multiple Choice

Scenario 4-1
In a given year, country A exported $12 million worth of goods to country B and $6 million worth of goods to country C; country B exported $4 million worth of goods to country A and $7 million worth of goods to country C; and country C exported $5 million worth of goods to country A and $2 million worth of goods to country B.
-Which of the following statements about transfer payments is true?

• A)Transfer payments are not included in total government expenditures.
• B)Transfer payments involve the international remittance of funds.
• C)Transfer payments refer to the transfer of money by the commercial banks to the people.
• D)Transfer payments are made by the government to taxpayers.
• E)Transfer payments are made when governments purchase goods and services.

---

Definitions:

Exchange

A marketplace where securities, commodities, derivatives, and other financial instruments are traded.

Future

In finance, a future is a standardized legal agreement to buy or sell something at a predetermined price at a specified time in the future, often used as a financial instrument for hedging or speculation.

Swap Contract

A swap contract is an agreement between two parties to exchange financial instruments or cash flows at a future date based on specified terms.

Specified Cash Flows

Specified Cash Flows refers to particular amounts of money that are expected to be received or paid out at defined times during the life of a financial instrument or investment.