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International Finance - Capital Accounts

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What are the components of the capital account in the balance of payments? What are the components of the current account in the balance of payments? Suppose you know that a certain country has a surplus on the capital account on its balance of payments; what does this imply about the current account? What does a surplus in the capital account mean?

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Solution Summary

Surplus in capital accounting is discussed. The current account of the balance payments are discovered.

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What are the components of the capital account in the balance of payments? What are the components of the current account in the balance of payments?

First of all balance of payments is simply the summary of transactions between domestic and foreign residents for a specific country over a specified period of time. In the balance of ...

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