Answer the following statements true (T) or false (F)

1. There is a correlation between the level of economic development of a nation and the status of its balance of trade.
2. The balance of payments is more like an income statement than a balance sheet.
3. If a U.S. farmer ships grain to Italy, this constitutes a debit transaction in Italy’s balance of payments.
4. Overseas investments by U.S. citizens are recorded as credit items in the financial account of the U.S. balance of payments.
5. Since unilateral transfers do not involve trading of goods or services, they are not included in the current account.



1. TRUE
2. TRUE
3. TRUE
4. FALSE
5. FALSE

Economics

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