If a Country Raises Its Budget Deficit,then Net Capital Outflow

question 11

Multiple Choice

If a country raises its budget deficit,then net capital outflow

• A)rises,so the supply of its currency shifts right in the market for foreign-currency exchange.
• B)rises,so the demand for its currency shifts right in the market for foreign-currency exchange.
• C)falls,so the supply of its currency shifts left in the market for foreign-currency exchange.
• D)falls,so the demand for its currency shifts right in the market for foreign-currency exchange.

---

Definitions:

Debits

An accounting entry that results in either an increase in assets or a decrease in liabilities on a company's balance sheet or in its income statement.

Credits

An accounting entry that either increases liabilities and equity or decreases assets, reflective of the dual-entry bookkeeping system.

Rental Receipts

Income received from renting out property or equipment.

Unearned Revenue

Refers to payments received for products or services yet to be fulfilled, a liability on the balance sheet until delivery of service or product.