Which of the following statement is true?
A)In each period,except for measurement errors,the current account balance and the capital account balance must sum to zero.
B)In each period,except for measurement errors,the sum of the current account balance and the capital account balance must be positive.
C)In each period,except for measurement errors,the sum of the current account balance and the capital account balance must be negative.
D)In each period,except for measurement errors,the sum of the current account balance and the capital account balance may be positive or negative.

Question

Quizplus · Accepted Answer

The statement "In each period,except for measurement errors,the current account balance and the capital account balance must sum to zero" is true according to the accounting identity of balance of payments. This identity states that the current account balance plus the capital account balance (which includes financial flows) must equal zero, as one country's current account surplus is another country's current account deficit and vice versa. Therefore, the correct answer is A.

Which of the Following Statement Is True