When the balance-of-payments accounts are recorded correctly, the combined balance of the current account, the capital account, and the reserves account must be
A)equal in magnitude to the country's national debt.
B)zero.
C)equal in magnitude to the Trade Deficit or Surplus.
D)none of the above

Question

Quizplus · Accepted Answer

The balance-of-payments accounts follow the principle of double-entry accounting, meaning that every transaction must be recorded in two accounts. As a result, the sum of credits must be equal to the sum of debits. Therefore, the combined balance of the current account, the capital account, and the reserves account must be zero.

When the Balance-Of-Payments Accounts Are Recorded Correctly, the Combined Balance