Suppose the current account of a country is in balance and the official settlements account equals 0. A new transaction occurs so that the current account is now in surplus, but the official settlements account does not change. From this we know that
A) the capital account is now in deficit.
B) the balance of trade is now in surplus.
C) the government must make official reserve transactions.
D) the government is running a budget deficit.
Correct Answer:
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Q310: If the official settlements account equals zero,
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