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25 March, 06:48

Suppose the balance on the current account is + $50 billion and the balance on the capital account is + $1 billion. The balance on the financial account is

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  1. 25 March, 06:57
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    -$49 billion

    Explanation:

    The balance on the financial account = capital account balance - current account balance = $1 billion - $50 billion = - $49 billion

    The balance of payments (BOP) = current account balance + financial account balance + capital account balance

    since BOP is always $0, then:

    capital account balance = current account balance + financial account balance

    $1 billion = $50 billion - $49 billion
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