Under a system of flexible exchange rates, in the long run, a nation's balance on current account and capital account transactions will
a. increase continuously.
b. decrease continuously.
c. tend to net out to zero, indicating a balance between the debits and credits.
d. tend to increase if the nation is running a balance of trade surplus and decrease if it is running a balance of trade deficit.
C
You might also like to view...
Inflows of immigrant workers tend to reduce the wages of domestic-born workers. Under which of the following circumstances is this least likely to occur?
A. Migration between countries is unimpeded. B. Immigrant workers make remittances to their home country. C. Immigrant workers and domestic-born workers are substitute resources. D. Immigrant workers and domestic-born workers are complementary resources.
Which of the following is a TRUE statement about a monopoly?
A. A monopoly does not necessarily earn positive economic profits. B. As long as the demand curve slopes down, a monopoly can always find some price-output combination that generates positive economic profits. C. A monopoly must earn an above-normal profit to stay in business. D. As long as there are barriers to entry, a monopoly can always find some price-output combination that generates positive economic profits.