Use the table below to answer the following questions.
Table 25.4.1

-Refer to Table 25.4.1. If Mengia's official settlement balance was in surplus every year, for which year or years can you say for sure there was a current account deficit?
A)year 1 only
B)year 2 only
C)years 2 and 3
D)years 1 and 2
E)years 3 and 4

Question

Use the table below to answer the following questions.
Table 25.4.1
 
-Refer to Table 25.4.1. If Mengia's official settlement balance was in surplus every year, for which year or years can you say for sure there was a current account deficit?
A)year 1 only 
B)year 2 only 
C)years 2 and 3 
D)years 1 and 2 
E)years 3 and 4

Quizplus · Accepted Answer

The current account balance is equal to the official settlement balance minus the capital account balance. If the official settlement balance is in surplus every year, then the current account balance can only be in deficit if the capital account balance is in deficit. In years 1 and 2, the capital account balance is in deficit, so the current account balance must be in deficit in those years.

Use the Table Below to Answer the Following Questions