Balance of Payments (BOP) Accounts- Macro 6.1

What are the two main components of the balance of payments?

• Current account and financial account

• Surplus account and deficit account

• Export account and import account

• Trade account and investment account

What does a trade deficit indicate about a country's imports and exports?

• Exports are greater than imports

• Imports are greater than exports

• Exports and imports are equal

• Neither exports nor imports are significant

If the United States has a trade deficit with China, what does China have with the United States?

• Trade deficit

• Trade surplus

• No trade relationship

• Balanced trade

What does the financial account primarily deal with?

• Currency exchange rates

• Net transfers

• Assets and investments

• Goods and services

What happens to the financial account when a country has a current account deficit?

• It also shows a deficit

• It shows a surplus

• It becomes negative

• It remains unchanged