ECONOMICS
BALANCE OF PAYMENTS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The financial account moves to a deficit
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Financial capital inflows increase
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Financial capital outflows increase
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Exports increase
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Remittances increase
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Detailed explanation-1: -What change will occur in the balance of payments accounts in Wakanda when it sells bonds to Hamsterville? Financial capital inflows increase When Wakanda sells a bond to another country, money comes into the country to pay for the bond, and the bond itself exits the country.
Detailed explanation-2: -HINT: When Wakanda sells bonds to Atlantis, money comes into Wakanda to pay for the bonds and the bond itself exits the Wakanda. Because funds have come into the Wakanda, this represents an inflow (in other words a credit) in the balance of payments.
Detailed explanation-3: -Answer and Explanation: The answer is c). The two accounts in the balance of payment system are the current account and capital account.
Detailed explanation-4: -The balance of payments (BOP), also known as the balance of international payments, is a statement of all transactions made between entities in one country and the rest of the world over a defined period, such as a quarter or a year.