"The Balance of payments is always balances." Discuss
What will be an ideal response?
True. Every international transaction automatically enters the balance of payments twice, once as a credit and once as a debit.
Current account + financial account + capital account = 0
You might also like to view...
Keynesians argue that an exogenous decrease in investment is likely to lead to
A) an increase in interest rates. B) an increase in saving. C) a decrease in the money supply. D) a decrease in output.
Suppose that Philip is the best contractor in town, and he makes $400,000 a year. Suppose that Julia Roberts is the best and highest paid actress in Hollywood, and she makes $13 million per movie. Both are the best in their respective fields of work. One reason for the significant difference in incomes has to do with the nature of the service each offers. Philip's contracting services
a. can be provided to an unlimited number of customers in a year, but Julia's work is sold to only a few individuals in a year. b. can only be provided to a limited number of customers in a year, but Julia's work is sold to millions of individuals in a year — i.e., to anyone who has the willingness and ability to pay for admission to her movies. c. can be provided to a unlimited number of customers in a year, and Julia's work is sold to millions of individuals in a year — i.e., to anyone who has the willingness and ability to pay for admission to her movies. d. can only be provided to a limited number of customers in a year, and Julia's work is sold to only a few individuals in a year.