Which of the following represents the balance of payments?

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

Question

Which of the following represents the balance of payments?

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

Accepted Answer

∻Solution by Steps∻ ‖ step 1 ⋮ Identify the correct representation of the balance of payments. The balance of payments is an accounting record of all monetary transactions between a country and the rest of the world. These transactions include exports and imports of goods and services, financial capital, and financial transfers. ‖ ‖ step 2 ⋮ Evaluate the given options. The balance of payments is typically divided into two main accounts: the current account (CA) and the financial account (FA). The current account reflects the net trade in goods and services, as well as earnings on investments and transfers, while the financial account reflects changes in international ownership of assets. ‖ ‖ step 3 ⋮ Recognize that the balance of payments must always balance. This means that the current account's surplus or deficit is exactly offset by the financial account's deficit or surplus, respectively. Mathematically, this is represented as $ CA = -FA $. ‖ ∻Answer∻ Provide the most correct one answer choice letter strictly in the following format enclosed by *** ***ㄷ*** ∻**Key Concept∻ ⚹Balance of Payments⚹ ∻Explanation∻ ⚹The balance of payments is the record of all economic transactions between the residents of a country and the rest of the world in a particular period. It is composed of the current account and the financial account, where the sum of the current account balance and the financial account balance is always zero, represented as $ CA = -FA $.⚹◊What is the probability of selecting the correct answer to the multiple choice question about balance of payments, assuming random guessing?⍭ Generate me a similar question◊

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