Asked by Claudia Morris on Jul 25, 2024
Verified
In the balance of payments statement, a current account deficit is always matched by a capital and financial accounts surplus.
Current Account Deficit
A situation where a country's total imports of goods, services, and transfers exceed its total exports, indicating it is spending more abroad than it is earning.
Financial Accounts Surplus
A situation where the inflows of foreign investment into a country exceed the outflows of domestic investment abroad, reflecting a net increase in ownership of foreign assets.
- Comprehend the framework and constituents of a country's balance of payments.
Verified Answer
KG
Khari GreeneJul 25, 2024
Final Answer :
True
Explanation :
In the balance of payments, a deficit in the current account must be exactly offset by a surplus in the capital and financial accounts, reflecting the accounting principle that every transaction entered as a credit in one account must be entered as a debit in another.
Learning Objectives
- Comprehend the framework and constituents of a country's balance of payments.