Correct Answer: D. build houses

Explanation

(a) Balance of payments means the relationship between the sum total of a country's payment for her import receipts for her export . It is thus a statement of income and expenditure on international account, for a period of usually one year.

(b) Components of balance of payments are:

(I) Current account:This is made up of the total receipts and payments on both visible and invisible goods e.g. banking, insurance, shipping and tourism. It consists of visible and invisible trade account.

(ii) Capital account:This account is made up of the movement or flow of money from one country to another such as investments, international grants and loans. These are short and long term capital movements. A country's balance of payments is favourable when money received is more than the amount she pays out and vice versa.

(iii) Monetary movement account:This shows how the balance on both current and capital accounts is settled. It shows how the surplus or deficit on both accounts is settled.

Correct Answer: C. demand and supply are equal

Correct Answer: B. more is sold at the same price

Correct Answer: C) it is determined by both demand and supply forces

Explanation

The question is asking what happens to the quantity of good X that is actually exchanged when the market for good X is in disequilibrium. Disequilibrium means that the demand and supply forces in the market are not balanced, which can result in either a shortage or a surplus of the good.

Option A suggests that the quantity of good X that is actually exchanged is solely determined by the forces of demand. However, this is not necessarily true as the supply side also plays a role in determining the quantity of good X that is actually exchanged.

Option B suggests that the quantity of good X that is actually exchanged is solely determined by the forces of supply. However, this is also not necessarily true as the demand side also plays a role in determining the quantity of good X that is actually exchanged.

Option C, which is the correct answer, suggests that the quantity of good X that is actually exchanged is determined by both the demand and supply forces. When the market for good X is in disequilibrium, the quantity of good X that is actually exchanged will be determined by the side with the stronger force, which can either be demand or supply.

Option D suggests that the quantity of good X that is actually exchanged is determined by the forces of demand or supply, whichever is shorter. This option is not correct as the quantity of good X that is actually exchanged is not determined by the shorter side but rather by the side with the stronger force.

In summary, when the market for good X is in disequilibrium, the quantity of good X that is actually exchanged is determined by both demand and supply forces, with the side having the stronger force determining the quantity of good X that is actually exchanged.

Correct Answer: B. Inductive reasoning

Explanation

The deductive reasoning method involves following one or more factual statements that have been established to arrive at a conclusion. Deductive reasoning aims at testing an existing theory. From the question above, there are existing data from which logical conclusions will be drawn and this makes it deductive reasoning. While inductive reasoning aims at developing a theory, deductive reasoning aims at testing an existing theory.

Correct Answer: D. complements

Explanation

A complementary good is a good whose use is related to the use of an associated or paired good. An increase in the price of one, will also affect the demand of the other good. Example; computers need software to function. An increase in the price of a computer system, will affect the demand of software

Correct Answer: A. various bills are exchanged

Correct Answer: D. zero

Correct Answer: B. reducing tarrifs

Explanation

Tariffs are duties (taxes) imposed on imports. When tariffs are imposed, the prices of imports would increase to the extent of tariff. The increased prices will reduced the demand for imported goods and at the same time induce domestic producers to produce more of import substitutes. Non-essential imports can be drastically reduced by imposing a very high rate of tariff. Therefor, reducing tariffs will further increase balance of payment deficits.