Question : When a country's current account deficit increases, its capital account balance is likely to:

Option 1: Increase

Option 2: Decrease

Option 3: Remain unchanged

Option 4: It is not related to the current account deficit

Question : A country's balance of payments can be in equilibrium when:

Option 1: Its exports equal its imports

Option 2: Its capital inflows equal its capital outflows

Option 3: Its current account balance is zero

Option 4: All of the above

Question : If a country experiences a decrease in its foreign exchange reserves, it indicates:

Option 1: A surplus in the current account

Option 2: A deficit in the current account

Option 3: A surplus in the capital account

Option 4: A deficit in the capital account

Question : When a country experiences a depreciation in its currency, it will likely have a positive impact on its:

Option 1: Imports

Option 2: Exports

Option 3: Current account balance

Option 4: Capital account balance

Question : If a country experiences an increase in its foreign exchange reserves, it indicates:

Option 1: A surplus in the current account

Option 2: A deficit in the current account

Option 3: A surplus in the capital account

Option 4: A deficit in the capital account