Which of the following is correct?
A)Current account surplus + capital account surplus = 1
B)Current account surplus − capital account surplus = 0
C)Current account surplus + capital account surplus = 0
D)Current account surplus − capital account surplus = 1

Question

Quizplus · Accepted Answer

The balance of payments is composed of the current account and the capital (and financial) account. When a country has a current account surplus, it must have a capital account deficit of the same amount (or vice versa), so that the sum of the current account and capital account balances equals zero. This ensures the balance of payments is always balanced, reflecting the double-entry accounting system used in international finance.

Which of the Following Is Correct