In a floating exchange rate system, the capital account balance equals

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In a floating exchange rate system, the capital account balance is the negative of the current account balance. This is because the balance of payments, which is the sum of the current account balance and the capital account balance, must equal zero. If there is a surplus in the current account, there must be a corresponding deficit in the capital account, and vice versa.

In a Floating Exchange Rate System, the Capital Account Balance