If a Nation Has a Balanced Current Account and Its

question 144

Multiple Choice

If a nation has a balanced current account and its net external wealth is positive:

• A) it is a net debtor and payment flows are negative.
• B) it is a net creditor and payment flows are positive.
• C) it is in balance and its payment flows are zero.
• D) it has liabilities greater than assets.

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Definitions:

Market Prices

Market Prices refer to the current price at which an asset or service can be bought or sold in a particular market.

Securities

Financial instruments that represent an ownership position in a publicly-traded corporation or a creditor relationship with a government or corporation.

Perpetuity

An annuity that pays a constant stream of cash flows indefinitely.

Duration

An indicator of how a bond or debt security's price is affected by interest rate fluctuations, usually stated in terms of years.