Question: In an economy with a high dependency on tourism, which faces a prolonged period of border closures due to global health concerns, what is the most likely short-term impact on the country's current account balance? A. A significant improvement in the current account balance due to a decrease in international travel expenditures. B. A deterioration in the current account balance due to a sharp fall in tourism revenues. C. No significant change in the current account balance, as reduced tourism is offset by increased domestic spending. D. A shift towards a surplus in the trade balance as imports decrease due to reduced demand from tourists. Don't use chatgpt please provide valuable answer

Question: In an economy with a high dependency on tourism, which faces a prolonged period of border closures due to global health concerns, what is the most likely short-term impact on the country's current account balance? A. A significant improvement in the current account balance due to a decrease in international travel expenditures. B. A deterioration in the current account balance due to a sharp fall in tourism revenues. C. No significant change in the current account balance, as reduced tourism is offset by increased domestic spending. D. A shift towards a surplus in the trade balance as imports decrease due to reduced demand from tourists. Don't use chatgpt please provide valuable answer

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter23: The International Trade And Capital Flows

Section: Chapter Questions

Problem 44P: Imagine that the U.S. economy finds itself in the following situation: a government budget deficit...

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1. Which of the following falls under the current account of the Philippines? a. The value of the Philippines' export of goods increased due to the increase in demand from China. b. The value of the Philippines' import of goods increased due to a high domestic demand for raw materials. c. Both a and b d. None of the above 2. What is the difference between current account and financial account? a. Current account measures the difference between import and export while financial account measures sales of import and export. b. Current account measures transactions that do not create liabilities while financial account measures those that do. c. Current account measures transactions that create liabilities while financial account measures those that don't. d. None, they are the same. 3. Which of the following statements is correct? a. There is trade surplus when import equals export. b. There is trade surplus when export equals import. c. There is trade deficit when export is greater than…
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