Suppose the current account of a country is in balance and the ...

[Cooldude101]

Suppose the current account of a country is in balance and the official settlements account equals 0. A new transaction occurs so that the current account is now in surplus, but the official settlements account does not change.
 
  From this we know that A) the balance of trade is now in surplus.
  B) the government is running a budget deficit.
  C) the capital and financial account is now in deficit.
  D) the government must make official reserve transactions.

Question 2

Which of the following makes demand less elastic?
 
  A) the existence of many close substitutes for the good
  B) spending a large proportion of income on the good
  C) a short time elapsing since the product's price changed
  D) All of the above answers are correct.

[dreamfighter72]

Answer to Question 1

C

Answer to Question 2

C

[Cooldude101]

Correct answers!

[dreamfighter72]

Great! Please up vote