Asked by Ronald Blair on Jul 06, 2024

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In the balance of payments statement, a current account surplus will be matched by a

A) capital and financial accounts deficit.
B) capital and financial accounts surplus.
C) trade deficit.
D) trade surplus.

Current Account Surplus

A situation where a country's total exports of goods, services, and transfers exceed its total imports.

Financial Accounts Deficit

A situation where a country's payments to other countries exceed its earnings from them, specifically in the realm of investment flows and financial transactions.

Capital Account

A national account that shows the net change in asset ownership for a nation, including assets in foreign investments and movements of capital.

  • Familiarize oneself with the linkage between the balance of the current account and the capital and financial accounts balances.
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Suzzette-Ann SimmonsJul 09, 2024
Final Answer :
A
Explanation :
A current account surplus indicates that a country is exporting more than it is importing. This surplus must be balanced by a net outflow in the capital and financial accounts, meaning a deficit in these accounts, as funds flow out of the country to invest in foreign assets or pay off debts.