(Table) The capital account balance must be a: $\begin{array}{c}
\begin{array}{lll}
\hline \text { Current Account}\
\hline \text { Balance of trade}\
\text { Balance on income}\
\text { Net transfers}\
\hline \text { Capital Account}\
\hline
\end{array}
\begin{array}{lll}
\hline\
\hline (\$100)\
25\
(10)\
\hline\
\hline
\end{array}
\end{array}$

Question

(Table) The capital account balance must be a: $\begin{array}{c}
\begin{array}{lll}
 \hline \text { Current Account}\
 \hline \text { Balance of trade}\
 \text { Balance on income}\
 \text { Net transfers}\
 \hline \text { Capital Account}\
 \hline
\end{array}
\begin{array}{lll}
 \hline\
 \hline (\$100)\
25\
(10)\
 \hline\
 \hline 
\end{array}
\end{array}$

Quizplus · Accepted Answer

The capital account balance must offset the current account balance to ensure the overall balance of payments is zero. The current account balance is -$85 ($100 deficit in trade, $25 surplus in income, and $10 deficit in transfers). Therefore, the capital account must have a surplus of $85 to balance it.

(Table) the Capital Account Balance Must Be A A) Deficit of $85