The balance of payments of a country will be in surplus if :
With capital inflows positive, autonomous receipts exceeding payments require an offsetting accommodating outflow/reserve accumulation. Thus “accommodating capital is…
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The balance of payments of a country will be in surplus if :
Answer and explanation
Correct answer A
With capital inflows positive, autonomous receipts exceeding payments require an offsetting accommodating outflow/reserve accumulation. Thus “accommodating capital is negative” indicates a surplus above the accommodating line. “Accommodating capital is positive” finances an autonomous deficit; “Accommodating capital is zero” corresponds to no imbalance requiring accommodation. “Accommodating capital is neither negative, positive, nor zero” is inapplicable. Total accounts still balance once all entries are included.
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UGC NET Economics