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- Subject
- The Balance of Paymentseconomics-mcqs › the-balance-of-payments
- Published
- 27 Jun 2019
- Last updated
- 28 May 2026
Explanation
The balance of payments is an accounting record that must balance out, meaning the total of all credits and debits across the current, capital, and financial accounts sums to zero. Therefore, the overall balance cannot be positive or negative, but must be zero. Options A and B incorrectly assume a direct surplus or deficit correlation between accounts, and option C incorrectly states the total must be positive.
More The Balance of Payments MCQs
Practice related questions from the same subject.
- 1.What term describes the difference between a nation's exports and imports of goods?
- 2.What is required to reconcile discrepancies in the balance of payments accounts?
- 3.What does the balance of trade specifically measure?
- 4.Which economic pattern is commonly observed in countries during the initial phases of rapid economic growth?
- 5.What does it indicate when a nation experiences a trade deficit?
- 6.What does a surplus in the current account indicate about a country?
- 7.What does it indicate when a country has a current account deficit?
- 8.How does a country's balance of payments differ from its balance of international indebtedness?
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