Question : A country's balance of payments must always be_______________.
Option 1: stable
Option 2: balanced
Option 3: surplus
Option 4: deficit
Correct Answer: balanced
Solution : The correct answer is (b) balanced
A country's balance of payments should ideally be balanced, meaning that the inflows and outflows of funds in the current account, capital account, and financial account are equal. However, in practice, it is common for countries to experience deficits or surpluses in their balance of payments. A balanced balance of payments indicates that the country's total receipts from exports, inflows of capital, and financial transactions match its total payments for imports, outflows of capital, and financial transactions.
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