Macro 6.1 Balance of Payments

The capital and financial account includes money from the purchase of goods and services.

• True

• False

When money flows into a country we call it:

• An inflow

• An outflow

When the account has more debits than it has credits we call it a:

• surplus and the value of the account is positive

• deficit and the value of the account is negative

Exports-imports= (new term--NOT the one you already know)

It's possible to have a trade deficit but not have a deficit in the overall current account.

• True

• False

When the value of the dollar appreciates or depreciates we see a change in the value of the current account because:

• Consumer income is changing

• Net exports is changing

• Government spending is changing

When calculating the current account we include all of the following EXCEPT:

• Net exports

• Net Transfers

• The purchases and sales of assets

• Net investments

When calculating the value of the capital and financial account which is included:

• Net exports

• Investment Income

• Transfers of money

• Purchases and sales of assets