Question

Which of these statement is correct about Balance of Payment?

• A. Balance of payment account will always balance in accounting sense
• B. There can be deficit in balance of payment account
• C. There can be surplus in balance of payment account
• D. All the three are possible

Answer 1

Answer: (D)

All the three are possible

While the balance of payments account must always balance in an accounting sense, it is possible for the balance of payment account to be in surplus on either the capital or current account, and have and equal amount of deficit to match this surplus.