CFA Practice Question

There are 341 practice questions for this study session.

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.

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