- CFA Exams
- CFA Level I Exam
- Study Session 5. Economics (2)
- Reading 17. International Trade and Capital Flows
- Subject 4. The Balance of Payments
CFA Practice Question
If a nation is running a surplus in its current account, ______
A. it is running a deficit in its capital/financial account.
B. it is running a surplus in its capital/financial account.
C. its net unilateral transfers or net income earned abroad must be negative.
Explanation: A surplus in the capital/financial account must be balanced by a deficit in the capital account. That is how the balance of payments "always balances." Negative unilateral transfers or net income earned abroad would contribute to a current account deficit.
User Contributed Comments 0
You need to log in first to add your comment.