The balance of payments identity is given by BCA + BKA + BRA = 0.Rearrange the identity to solve for the statistical discrepancy.
A)The statistical discrepancy = (BCA + BKA)− BRA
B)The statistical discrepancy = BCA − BKA + BRA
C)The statistical discrepancy = BCA − BKA − BRA
D)The statistical discrepancy = BCA + BKA + BRA

Question

Quizplus · Accepted Answer

The balance of payments identity is given by BCA (Balance of Current Account) + BKA (Balance of Financial Account, often referred to as the capital account in broader terms) + BRA (Balances of Reserves Account) = 0. The statistical discrepancy is not explicitly mentioned in the equation, but the equation itself represents that any discrepancy in the recording of these transactions would sum to zero, indicating there is no separate term for statistical discrepancy in this identity.

The Balance of Payments Identity Is Given by BCA