Answer to Question #62648 in Macroeconomics for Aurelio Sca

Question

Mark correct statements about the balance of payments (BoP). (several answers possible)
(a) BoP is always balanced, literally speaking, because it is an accounting identity.
(b) If the current account (CA) in the BoP is in surplus, it means that the country exports more goods and services than it imports.
(c) If the capital account (CP) in the BoP is in surplus, it means that the country exports more capital than it imports.
(d) How the BoP equilibrium is achieved depends on the exchange rate regime.

Answer 1

(a) BoP is always balanced, literally speaking, because it is an accounting identity.
(b) If the current account (CA) in the BoP is in surplus, it means that the country exports more goods and services than it imports.
(d) How the BoP equilibrium is achieved depends on the exchange rate regime.