Question

From the following, identify the situation which indicates the Current Account Surplus (CAS) in Balance of Payments (BOP) account of a nation.

• A. Excess of receipts on current account over the payments on current account.
• B. Equality of receipts on current account and payments on current account.
• C. Excess of payments on current account over receipts on current account.
• D. Excess of payments on current account over receipts on capital account.

Hint:

CAS is a positive economic indicator as it shows the country is earning more from its exports and investments than it is spending on imports.

Answer 1

The Correct Option is A

Current Account Surplus (CAS) occurs when a country’s receipts from exports, investments, and other transactions exceed its payments for imports and foreign obligations. This results in a surplus on the current account in the Balance of Payments (BOP).