Which of the following is true of the balance of payments accounts?
A)It records only the trade in tangible assets between any two nations.
B)It is a record of a country's merchandise trade.
C)It records the total external debt used to finance government budget deficits.
D)It is recorded biannually in most developed countries.
E)It records a country's trade in goods, services, and financial assets with the rest of the world.

Question

Quizplus · Accepted Answer

The balance of payments accounts record a country's trade in goods, services, and financial assets with the rest of the world. Option A is incorrect as it only mentions tangible assets, whereas the accounts record intangible assets as well. Option B is incorrect because the accounts record not only merchandise trade but also other transactions. Option C is incorrect because it does not record total external debt, but rather the balance of payments, which includes both transactions in and out of the country. Option D is incorrect because the frequency of recording the accounts varies by country and can be more or less frequent than biannually.

Which of the Following Is True of the Balance of Payments