Assume That the Balance-Of-Payments Accounts for a Country Are Recorded

question 71

Multiple Choice

Assume that the balance-of-payments accounts for a country are recorded correctly. Balance on the current account = BCA = $130 billion
Balance on the capital account = BKA = −$86 billion
Balance on the reserves account = BRA =?
In a pure flexible exchange rate regime,a country's central banks will not need to maintain official reserves.Under this regime

• A)−BCA = BKA.
• B)BCA = −BRA = 0.
• C)BKA = −BRA.
• D)BSA = BCA.

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