Question

If a country has a current account deficit of $200 billion, this means that: Question 2...

If a country has a current account deficit of $200 billion, this means that: Question 2 options: a) it will have a capital account deficit of more than $200 billion. b) it will have a capital account surplus of $200 billion. c) it will have a capital account surplus of more than $200 billion. d) it will have a capital account deficit of $200 billion.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Answer : b ) When a country current account deficit it means that the country import more than export . The current account deficit led to the decrease in the demand of currency , thereby depreciating currency which result the inflow of foreign caiptal to the home country . When current account deficit of $200 billion , it will inflow of foregin capital more . Inflow and outflow of foregin capital are calculated in to the capital account and always maintain that capital account is zero in accounting sense so when deficit arise $200 billion it will have a capital account surplus of $ 200 billion .

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
1. Suppose for some country that the Current account is in deficit of $450 billion. If...
1. Suppose for some country that the Current account is in deficit of $450 billion. If the Financial account is in a surplus of $500 billion. Explain clearly what must be the state of the Capital account? (provide both a numerical magnitude with an explanation). 2.Suppose an economy has a long run saving level of $5billion and the level of investment spending is also the same at $5billion. If the government in this economy was to raise taxes and lower...
Question 13 1. Suppose that goods in a foreign country seem cheap from a domestic country...
Question 13 1. Suppose that goods in a foreign country seem cheap from a domestic country perspective. This means that, a. the domestic currency is relatively weak and the real exchange rate for the domestic currency is less than 1 b. the domestic currency is relatively weak and the real exchange rate for the domestic currency is greater than 1 c. the domestic currency is relatively strong and the real exchange rate for the domestic currency is less than 1...
11. Which of the following is true? A) A current account deficit occur when domestic investment...
11. Which of the following is true? A) A current account deficit occur when domestic investment is greater than national savings. B) Loans from abroad add to a country’s stock of external debt and generate debt service. C) All countries have external debts in the world. D) all of the above. 12. Whenever a country’s GNP exceeds its domestic absorption (= C + I + G), it must be true that A) this country’s financial account is in surplus. B)...
Why must a country with a current account surplus always have a financial account deficit? Please...
Why must a country with a current account surplus always have a financial account deficit? Please give an explanation.
Why must a country with a current account surplus always have a financial account deficit? Please...
Why must a country with a current account surplus always have a financial account deficit? Please give an explanation.
A country running persistent current account deficit and high inflation will ________ ans why? A tend...
A country running persistent current account deficit and high inflation will ________ ans why? A tend to have an appreciating currency. B. tend to also have a persistent capital account deficit. C. experience fiscal governmental budget deficit roughly equivalent to the current account deficit. D.tend to have a depreciating currency E none of the above.
Occasionally, a country will have a Current Account deficit and at the same time a Capital...
Occasionally, a country will have a Current Account deficit and at the same time a Capital Account deficit. Explain how this can happen.
If a country runs a current account deficit and the government has a balanced fiscal budget,...
If a country runs a current account deficit and the government has a balanced fiscal budget, then combined national private savings and domestic investment accounts A. must be positive. B. could be either negative or positive depending on the net international investment position. C. must be balanced. D. could be either negative or positive depending on the capital account. E. must be negative.
If a country runs a current account deficit and the government has a balanced fiscal budget,...
If a country runs a current account deficit and the government has a balanced fiscal budget, then combined national private savings and domestic investment accounts A. could be either negative or positive depending on the net international investment position. B. must be negative. C. must be balanced. D. could be either negative or positive depending on the capital account. E. must be positive.
Which of the following is true of a current account surplus?​ ​A country that is running...
Which of the following is true of a current account surplus?​ ​A country that is running a current account surplus will have negative net exports. ​A current account surplus means that a country is also running a net surplus in its financial account. ​A country can have a current account surplus only if it exports more services as compared to goods. ​A country that is running a current account surplus buys more bonds from the rest of the world as...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT