Question on: JAMB Economics - 2012
A deficit balance of payments is measured by subtracting the debits from the credits in the
A
current account
B
current and capital accounts
C
current and escrow accounts
D
capital and escrow accounts
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Correct Option: D
A deficit balance of payments is a situation where a country's total debits (payments to other countries) exceed its total credits (receipts from other countries). This imbalance is measured by analyzing the transactions recorded in both the current and capital accounts. The current account tracks trade in goods and services, while the capital account records investment flows. Both are necessary to determine the overall balance of payments.
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