Assertion (A): In an accounting sense, the balance of payments always balances.
Reason (R): Any gap between the current and capital accounts is matched by a change in official reserves.

Both A and R are true, and R is the correct explanation of A.Correct answerYour answerBoth A and R are true, but R is not the correct explanation of A.Correct answerYour answerA is true, but R is false.Correct answerYour answerA is false, but R is true.Correct answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer A

Correct answer: A

A shortfall is paid from reserves and a surplus adds to them, so total credits equal total debits.
R explains A.

Concept: BoP always balances
Typical timeTypical: 100 s
Your timeYours: —

The rule this testsThe BoP account

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Ten questions from Balance of Payments, at your own pace.

Assertion (A): In an accounting sense, the balance of payments always balances.Reason (R): Any gap between the current and capital accounts is matched by a change in official reserves.

Explanation

Assertion (A): In an accounting sense, the balance of payments always balances.
Reason (R): Any gap between the current and capital accounts is matched by a change in official reserves.