Question : Which of the following is not a factor that affects the capital account balance?
Option 1: Interest rates
Option 2: Political stability
Option 3: Domestic savings rates
Option 4: Exchange rates
Correct Answer: Domestic savings rates
Solution : The correct answer is (c) Domestic savings rates. Domestic savings rates primarily impact a country's domestic investment levels and the availability of funds for investment within the country. While domestic savings can indirectly influence the capital account balance by affecting the overall economic conditions and investment climate, it is not a direct factor that affects the capital account balance itself.
Question : Which of the following is not a factor that affects the current account balance?
Option 1: Trade policies
Option 2: Exchange rates
Option 3: Domestic inflation rates
Option 4: Domestic interest rates
Question : Which of the following is not a factor that affects a country's current account balance?
Option 1: Exchange rates
Option 2: Income levels
Option 3: Tariffs and trade barriers
Option 4: Domestic savings rates
Question : Which of the following is not a factor that affects the exchange rate?
Option 2: Inflation rates
Option 3: Government spending
Option 4: Political stability
Option 3: Capital flows
Option 4: Tariffs and trade barriers
Question : Which of the following is not a factor that affects the trade balance?
Option 2: Tariffs and trade barriers
Option 3: Domestic consumption
Option 4: foreign demand
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