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JAMB Economics 1983 Question 30

Question 30

Balance of Payments and Exchange Rates

Disequilibrium in the balance of payments means

  1. A.imports of the country exceeding its exports
  2. B.overall deficit or surplus in the current account and capital account of the balance of payments
  3. C.capital flowing out of the country exceeds the capital flowing into the country
  4. D.deficit in the trade balance
  5. E.export earnings exceed cost of imports.
Show the answer and explanation

Answer: B (overall deficit or surplus in the current account and capital account of the balance of payments)

Explanation

Disequilibrium is any overall imbalance, deficit or surplus, when current and capital accounts are taken together.