The balance of payments equals
A) the current account surplus plus the capital account surplus.
B) the current account surplus plus the capital account deficit.
C) the current account deficit plus the capital account surplus.
D) the current account deficit plus the capital account deficit.

Question

Quizplus · Accepted Answer

The balance of payments (BOP) is a record of all transactions between a country and the rest of the world over a certain period of time. It includes the current account and capital account transactions. The current account records all international trade in goods and services, while the capital account records all financial transactions like investment and loans. If there is a surplus in both the current account and capital account, then the BOP is positive, which means that the country has received more money from abroad than it has paid out. Therefore, the correct answer is A, which is the current account surplus plus the capital account surplus.

The Balance of Payments Equals