If net capital flow were zero for a country, then exports would not equal imports.
77) The balance of payments accounts are divided into two sections: the current account and the financial account.
78) The flow of capital results from the changes or differences in interest rates among countries.
79) If there is a current account surplus, then there is a financial account deficit.
80) In an open economy, total income is the sum of exports and imports.
81) Exports are positively related to domestic income and negatively related to the exchange rate.
82) Capital inflows occur if foreign interest rates are greater than domestic interest rates.
83) The political stability of countries has an impact on the foreign exchange market.
84) An increased supply of U.S. dollars on the foreign exchange market, all else equal, will result in an appreciation of the U.S. dollar.
85) A decreased demand for U.S. dollars on the foreign exchange market, all else equal, will result in a depreciation of the U.S. dollar.
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