Answer to Question #255635 in Macroeconomics for Minion

Question

When UK borrows from overseas, it is initially recorded in the Balance of Payments as a A. positive under Net Current Transfers in the current account. B. negative under Net Current Transfers as it is money owed. C. positive under Income in the current account. D. it is not recorded in the current account.

Answer 1

When the current account balance is positive then it shows that the nation is the lender of money but when it is negative it shows that it is the borrower. Hence UK borrowing money will be recorded as negative under Net Current Transfers as it is money owed.