Question

QUESTION 24 If there is a $500 billion deficit in the current account then (ignoring official settlements) there must be a: $500 million surplus in the capital account. So balance in the capital account. $0 balance in the current account. $500 million deficit in the capital account. QUESTION 25 Of the following the one that appears in the current account of the balance of payments is an Italian investor's purchase of IBM stock. income earned by U.S. subsidiaries of Barclay's Bank of London. a purchase of a British Treasury bond by the Fed. a loan by a Swiss bank to an American corporation. QUESTION 26 According to your textbook, acid rain: is overburden with unnecessary regulations. reduces visibility, damages property, erodes forests, and harms health. will kill you from only a few drops on your skin. actually enhances forest growth. is only harmful to health if directly exposed to your skin. QUESTION 27 An internality suggests: raises the question as to the extent of individual freedom if it depends on rationality all of the answers in this question. society faces a decision as to make decisions for people that are in their best interest. people are sometimes not rational QUESTION 28 The market can internalize the costs of smoking by: higher fire insurance premiums. all of the answers in this question. lower salaries. higher medical insurance premiums. QUESTION 29 The tragedy of commons is the overuse of a common resource. absence of incentives for people to pay for what they consume. fact that common resources are nonrival. underuse of a common resource. QUESTION 30 and transactions costs are The Coase Theorem is the proposition that private economic transactions are efficient and the market will internalize externalities if the number of involved parties is small, if property rights exist; high do not exist, high do not exist, low exist; low

Answer 1

24 Balance of payment records transaction between entities of one country with the rest of worldtb.transaction

Balance of payment should be zero, that is assets side should be matched by liabilities side of it. Sum of all transaction recorded in it should be zero. Hence any surplus of deficit in current account should be matched with deficit or surplus in capital account respectively.

Hence option a is correct.