The current account balance plus the capital account balance equals

Question

Quizplus · Accepted Answer

The current account balance measures the flow of goods and services between a country and the rest of the world, while the capital account balance measures the flow of financial capital. The sum of these two balances should be equal to the net change in a country's international reserves. Therefore, the correct choice is C, as it reflects this basic principle of balance of payments accounting. Choices A and B may be related to the balance of payments, but they are not equivalent to the sum of current and capital account balances.

The Current Account Balance Plus the Capital Account Balance Equals