If the United States Imports Another Good in Exchange for Assets

question 123

Multiple Choice

If the United States imports another good in exchange for assets transferred from an American bank to a foreign bank,in the U.S.balance of payments table

• A)the current account deficit rises and so the balance of payments deficit rises.
• B)the current and capital account deficits both rise and so the balance of payments deficit rises.
• C)the current and capital account deficits both rise and so the balance of payments is unaffected.
• D)the current account deficit rises by as much as the capital account surplus rises and the balance of payments is unaffected.
• E)the current and capital account deficits both fall and so the balance of payments deficit falls.

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Definitions:

Rhode Island

The smallest state in the United States by area, known for its sandy shores and Colonial towns.

Roger Williams

A Puritan minister in the early Colonial American period, founder of Rhode Island, and an early advocate for religious freedom and the separation of church and state.

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refers to a state of affairs in which all individuals within a society have similar economic opportunities, resources, and wealth.

Chesapeake Colonies

Refers to the English colonies in North America that were located around the Chesapeake Bay, notably Virginia and Maryland, in the 17th century.