The current account is A. a category of the balance of payments transactions tha
ID: 1227497 • Letter: T
Question
The current account is
A. a category of the balance of payments transactions that measures flows of real and financial assets.
B. a category of the balance of payments transactions that measures the exchange of merchandise, the exchange of services, and unilateral transfers.
C. the price of one nation's currency in term of the currency of another country.
D. the reserve assets created by the International Monetary Fund for countries to use in settling international payment obligations.
The agency which functions as a "lender of last resort" for national governments is the
A. International Trade Organization.
B. World Trade Organization.
C. World Trade Fund.
D. International Monetary Fund.
The United States' balance of payments is likely to improve when
A. the American government increases its spending on foreign aid.
B. the inflation rate in the United States rises relative to other countries.
C. American people want to invest more in foreign countries.
D. there is an increase in political instability in other countries.
Explanation / Answer
The current account is
B. a category of the balance of payments transactions that measures the exchange of merchandise, the exchange of services, and unilateral transfers.
The Current Account is one of the two accounts which make up the balance of payments.It consists of Net Current transfers,Net Exports(aka balance of trade) and Net income earnded ffrom abroad.
The agency which functions as a "lender of last resort" for national governments is the
D. International Monetary Fund.
Just like the Central Bank of a country acts as a lender of last resort to its bank,at an international level this role is played by the International Monetary Fund.
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