If a nation has a current account deficit and it does not have to make any inpayments or outpayments of official reserves,it must have a:

Question

Quizplus · Accepted Answer

If a nation has a current account deficit and does not have to make any inpayments or outpayments of official reserves, this means that the nation is accommodating the deficit through surplus in its capital and financial account. This surplus will balance out the deficit in the current account, resulting in a balanced overall balance of payments. Therefore, the correct choice is A, i.e., a surplus in its capital and financial account.

If a Nation Has a Current Account Deficit and It