The balance-of-payments identity is an equation that shows that the value of:
A)net exports equals the net capital outflow.
B)net capital inflow equals the net capital outflow.
C)imports must equal exports.
D)payments from a country equals payments to a country.

Question

Quizplus · Accepted Answer

The balance-of-payments identity states that net exports (the difference between a country's exports and imports) must equal the net capital outflow (the difference between the capital flowing out of a country and the capital flowing into it). This reflects the idea that any surplus or deficit in the current account (net exports) is offset by a corresponding deficit or surplus in the capital account (net capital outflow).

The Balance-Of-Payments Identity Is an Equation That Shows That the Value