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AP Macroeconomics Mea 4 A a Define the Current Account Ca the Capital and Financial Account Cfa and the Balance of Payments Bop B Explain How Questions

Practise classifying international transactions, calculating current and financial account balances, and using credits, debits, and CA + CFA = 0 to trace adjustments.

Syllabus
Effective Fall 2022
Course
AP Macroeconomics

Exam points

  • classify net exports, foreign income, and unilateral transfers as current-account transactions
  • classify cross-border purchases of bonds, shares, property, or businesses in the financial account
  • record money entering a country as a credit and money leaving as a debit in the correct account
  • calculate trade, current-account, or financial-account balances from transaction tables
  • use CA + CFA = 0 to infer the offsetting surplus or deficit and explain why the accounts balance

AP Macroeconomics Mea 4 A a Define the Current Account Ca the Capital and Financial Account Cfa and the Balance of Payments Bop B Explain How Questions question 1

[Maximum number: 1]

Assume that the economy of Vortania is in long-run equilibrium.

Based on the change in net exports identified in part D, what will happen to each of the following in the short run?

The capital and financial account (CFA) balance in Vortania. Explain.

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