Which of the Following Would Cause the Current Account to Decrease

question 27

Multiple Choice

Which of the following would cause the current account to decrease?

• A) an increase in the nominal exchange rate, E
• B) an appreciation of the home currency
• C) an increase in disposable income
• D) an increase in foreign prices, P
• E) a decrease in domestic prices, P

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Definitions:

Bank Service Charge

A fee charged by a bank for the maintenance of an account or for processing transactions.

Bank Reconciliation

The process of comparing and adjusting the balance shown in a company's bank statement with the amount shown in the company's own records.

Outstanding Checks

Checks that have been written and recorded in the payer's accounting system but have not yet been cashed or cleared by the bank.

Balance Per Bank

The balance as per bank refers to the amount of money shown in the bank's records as available in an account.