Consider how the United States balance of payments accounts are affected when U.S. banks forgive two billion in debt owed to them by the government of Argentina
What will be an ideal response?
In this case, the United States makes a two billion dollars capital transfer to Argentina, which should appear as a negative two billions entry in the capital account. The associated credit is in the financial account, in the form of a two billion dollars reduction in U.S. assets held abroad, i.e., a net asset "export," and therefore a positive balance of payments entry.
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A statement of assets and liabilities of any business entity is called
A) a balance sheet. B) an income statement. C) a statement of net worth. D) a cash flow statement.
Which of the following would cause both the equilibrium price and equilibrium quantity of potatoes (assume that potatoes are an inferior good) to decrease?
A) a technological advancement that results in a bumper crop of potatoes B) a freeze that sharply reduces potato output C) a decrease in consumer income D) an increase in consumer income