Assertion (A): A country can have a trade deficit and a current account surplus at the same time.
Reason (R): The current account adds services, income and transfers to the balance of trade.

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

If net invisibles are bigger than the trade deficit, the current account is in surplus. R explains A.

Concept: Trade deficit, current surplus
Typical timeTypical: 70 s
Your timeYours: —

The rule this testsBalance of trade and current account balance

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

Assertion (A): A country can have a trade deficit and a current account surplus at the same time.Reason (R): The current account adds services, income and transfers to the balance of trade.

Explanation

Assertion (A): A country can have a trade deficit and a current account surplus at the same time.
Reason (R): The current account adds services, income and transfers to the balance of trade.