Economics (AS & A Level) · Oct / Nov 2021 · Paper 12 · Question 21
9708Current account of the balance of payments
Why is it that a country's balance of payments must always balance?
- AExchange rate changes will correct any deficit or surplus.
- BOne country's deficit is balanced by another country's surplus.
- CThe current account is balanced by the capital and financial accounts.
- DThe government must act to correct any disequilibrium.
As printed in the paper
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Correct answer: C. The current account is balanced by the capital and financial accounts.
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