When all of the debit or credit items in the balance of payments are combined ?
Correct answer: D. the total surplus or deficit equals zero
- A. merchandise imports equal merchandise exports
- B. capital imports equal capital exports
- C. services exports equal services imports
- D. the total surplus or deficit equals zero
Explanation
Because every international transaction has matching credit and debit entries, the balance of payments balances in accounting terms. Thus, after all items are combined, the total surplus or deficit is zero, even if individual accounts show deficits or surpluses.
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The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
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