The difference between a country's balance of payments and its balance of international indebtedness?
Correct answer: D. reflects the difference between flow and stock concepts
- A. is equal to official reserve transactions
- B. occurs because of foreign exchange fluctuations
- C. reflects statistical discrepancies
- D. reflects the difference between flow and stock concepts
Explanation
The balance of payments records transactions during a period, so it is a flow concept. The balance of international indebtedness records the accumulated external assets and liabilities at a point in time, so it is a stock concept.
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