The important fact to recognize about the overall balance of payments is that it is always in balance,although imbalances do occur in subsets of the overall balance.

Question

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The overall balance of payments must always balance because it is a double-entry accounting system that records transactions made between one country and the rest of the world. Imbalances can occur within its subsets, such as the current account or the financial account, but these are offset by equal and opposite entries elsewhere in the account, ensuring the overall balance of payments sums to zero.

The Important Fact to Recognize About the Overall Balance of Payments