Which of the following must always balance ?
Correct answer: D. The balance of payments
- A. The balance of visible trade
- B. The balance of invisible trade
- C. The balance on the current account
- D. The balance of payments
Explanation
The balance of payments is an accounting statement, so total credits must equal total debits after including reserve changes and errors and omissions. Individual components such as visible trade or the current account may show a surplus or deficit.
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About Macroeconomics
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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