If there are no interventions by finance ministers or central banks in the international market, then a. the capital market will be greater than the current account. b. the capital market will equal the current account. c. the current account and the capital account must sum to zero. d. the current account will be greater than the capital market.

If there are no interventions by finance ministers or central banks in the international market, then

a. the capital market will be greater than the current account.

b. the capital market will equal the current account.

c. the current account and the capital account must sum to zero.

d. the current account will be greater than the capital market.

 

answer:

The correct answer is C. In the event of no intervention by finance ministers a deficit in the current account must be matched by a surplus in the capital account. The net balance of payments will thus be 0. The correct answer is thus C.

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