Which of the following is required to always be in equilibrium?

Multiple choice question for Basic of Economics. Select an option, then review the explanation below.

Explanation

The balance of payments must always balance because it records all economic transactions between residents of a country and the rest of the world. Unlike individual components such as the visible trade, invisible trade, or current account balances, the overall balance of payments accounts for all inflows and outflows, ensuring it sums to zero.

Practice related questions from the same subject.

1.Which of the following best describes deflation?
2.Under what condition can two nations benefit from engaging in international trade?
3.Which of the following represents a legitimate form of currency?
4.Which political ideology is best summarized by the phrase, "From each according to his ability, to each according to his needs"?
5.Which type of currency experiences a decline in its exchange rate due to a continuous balance of payments deficit?

Which of the following is required to always be in equilibrium?

Explanation

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