Which of the following represents the balance of payments?

Choose 1 answer:
(A) $M V=P Y$
(B) $\frac{1}{M P S}$
(c) $\frac{-M P C}{M P S}$
(D) $\frac{1}{ ext { reserve requirement }}$
() $C A=-F A$

Question

Which of the following represents the balance of payments?

Choose 1 answer:
(A) $M V=P Y$
(B) $\frac{1}{M P S}$
(c) $\frac{-M P C}{M P S}$
(D) $\frac{1}{	ext { reserve requirement }}$
() $C A=-F A$

Accepted Answer

∻Solution∻ ‖ a ⋮ Definition of Balance of Payments: The balance of payments (BOP) is a statement that summarizes an economy's transactions with the rest of the world for a specified time period. It includes the current account (CA) and the financial account (FA). ‖ ‖ b ⋮ Equation Representation: The balance of payments is represented by the equation $CA = -FA$, which indicates that the current account balance is equal to the negative of the financial account balance. ‖ ∻Answer∻ ⚹ (E) $CA = -FA$ ⚹ ∻Key Concept∻ ⚹ Balance of Payments ⚹ ∻Explanation∻ ⚹ The balance of payments is a comprehensive record of all economic transactions between residents of a country and the rest of the world. It is represented by the equation $CA = -FA$, where the current account (CA) and the financial account (FA) must balance out. ⚹◊What factors would impact the balance of payments in a country according to the choices provided in the OCR model?⍭ Generate me a similar question◊

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