Which of the following statements about the current account is accurate?

Choose 1 answer:
(A) It is not always balanced.
(B) It is always equal to the financial account.
(C) It is always positive.

D It is always negative.
(E) It is always equal to zero.

Question

Which of the following statements about the current account is accurate?

Choose 1 answer:
(A) It is not always balanced.
(B) It is always equal to the financial account.
(C) It is always positive.

D It is always negative.
(E) It is always equal to zero.

Accepted Answer

∻Solution∻ ‖ a ⋮ Definition of Current Account: The current account is a component of a country's balance of payments that includes the trade balance, net primary income, and net secondary income. ‖ ‖ b ⋮ Not Always Balanced: The current account is not always balanced because it can show a surplus or a deficit depending on the country's economic transactions with the rest of the world. ‖ ‖ c ⋮ Financial Account: The current account is not always equal to the financial account. The financial account records transactions that involve financial assets and liabilities, which can differ from the current account. ‖ ‖ d ⋮ Positivity and Negativity: The current account is not always positive or negative. It can vary based on the country's trade balance and other factors. ‖ ‖ e ⋮ Zero Balance: The current account is not always equal to zero. It can have a surplus or deficit, reflecting the economic activities of the country. ‖ ∻Answer∻ ⚹ (A) It is not always balanced. ⚹ ∻Key Concept∻ ⚹ Current Account Balance ⚹ ∻Explanation∻ ⚹ The current account is a part of the balance of payments that records a country's transactions with the rest of the world. It is not always balanced because it can show a surplus or a deficit depending on the economic activities and transactions. ⚹◊How can a country's current account balance impact its overall economic well-being?⍭ Generate me a similar question◊

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