A country's current account deficit is $50 billion and its capital account surplus (excluding reserves) is $30 billion. Its official reserves

fall by $20 billionCorrect answerYour answerrise by $20 billionCorrect answerYour answerfall by $80 billionCorrect answerYour answerdo not changeCorrect answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer A

Correct answer: A

Overall balance = −50 + 30 = −20: a BoP deficit.
The deficit is met by drawing $20 billion from reserves.

Concept: Deficit and reserves
Typical timeTypical: 100 s
Your timeYours: —

The rule this testsAutonomous and accommodating; BoP deficit

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

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A country's current account deficit is $50 billion and its capital account surplus (excluding reserves) is $30 billion. Its official reserves

Explanation