Question

Balance of payments always balances in an accounting sense.

• A. True
• B. False
• C. Can't say
• D. Varies between countries

Answer 1

The correct option is A True

The balance of payment of a country must always be in equilibrium, a surplus on one account must be met with a deficit of equal magnitude on the other. Thus, the sum of the capital account and the current account must always be zero leading to a balance in the BOP in accounting sense.