Suppose a country has a balance of -$25 billion in its current account. It must have what balance in its capital account?

Question

Quizplus · Accepted Answer

The balance of payments consists of the current account and the capital account. If a country has a negative balance in its current account (a deficit), it must finance this deficit by having a surplus in its capital account. Therefore, if the current account balance is -$25 billion, the capital account balance must be +$25 billion to offset this and balance the overall balance of payments.

Suppose a Country Has a Balance of -$25 Billion in Its