"If the official settlements balance is zero, a current account surplus must equal the capital account deficit." Is the previous statement correct or incorrect? Briefly explain your answer
What will be an ideal response?
The statement is correct. The sum of the current account balance plus the capital account balance plus the official settlements account must equal zero. If the official settlements account balance is zero, then the sum of the current account balance plus the capital account balance must equal zero. Therefore a current account surplus must be "balanced" by an equally-sized capital account deficit.
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As a firm produces more and more DVDs, the average cost of producing each DVD falls. A curve showing the behavior of the average cost of a DVD as more DVDs are produced
A) would be positively and then negatively sloped. B) would be positively sloped. C) would be horizontal. D) would be negatively sloped.
According to the quantity theory of money, inflation results when excessive paper money is in circulation
Indicate whether the statement is true or false