The Balance of Payments

A. is true by definition in all possible circumstances
B. is supported by recent U.S history
C. focuses only on the overall economy and is thus always true
D. fails to recognize that a current account deficit is matched by an equal inflow of foreign funds which finances employment increasing investment spending

A. merchandise trade account
B. services account
C. unilateral transfers account
D. capital account

A. a credit item in the current account
B. a debit item in the capital account
C. a credit item in the capital account
D. a debit item in the current account

A. the sum of merchandise trade and services
B. the current account plus long-term capital
C. the value of merchandise exports minus imports
D. short-term capital plus the basic balance

A. engage in more government spending
B. reduce government taxes
C. increases private investment spending
D. decrease domestic consumption

A. merchandise trade deficits
B. merchandise trade surpluses
C. capital/financial account surpluses
D. capital/financial account deficits

A. mean a loss of foreign exchange
B. bring foreign exchange into the country
C. indicate a surplus exist
D. exist at the bottom line after all accounts are totaled

A. the value of trade in merchandise
B. services
C. unilateral transfers
D. All of the above

A. capital outflow would cause the nation’s currency to depreciate contributing to a trade deficit
B. capital inflow would cause the nation’s currency to depreciate contributing to a trade deficit
C. capital inflow would cause the nation’s currency to appreciate contributing to a trade deficit
D. capital outflow would cause the nation’s currency to appreciate contributing to a trade deficit

A. investment inflows
B. merchandise exports
C. payments for American services to foreigners
D. private gives to foreign residents