Which of the following pairs is correctly matched?
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → Capital account surplus – capital inflows are greater than capital outflows
A surplus in any account means more coming in than going out. Only the capital account pair says this the right way round.
Option (1) Trade surplus – imports of goods are greater than exports of goods — Incorrect. That is a trade deficit. A surplus arises when exports exceed imports.
Option (2) Balanced current account – receipts on current account are greater than payments — Incorrect. Receipts greater than payments is a surplus. Balance needs receipts equal to payments.
Option (3) Current account deficit – the nation is a lender to other countries — Incorrect. A deficit makes the nation a borrower; a surplus makes it a lender.
Option (4) Capital account surplus – capital inflows are greater than capital outflows — Correct. More capital flows in than flows out.
NCERT (2026-27): “Balance on Current Account Current Account is in balance when receipts on current account are equal to the payments on the current account. A surplus current account means that the nation is a lender to other countries and a deficit current account means that the nation is a borrower from other countries.” “Balance on Current Account … Surplus BOT or Trade surplus will arise if country exports more goods than what it imports. Whereas, Deficit BOT or Trade deficit will arise if a country imports more goods than what it exports.” “Balance on Capital Account … Surplus in capital account arises when capital inflows are greater than capital outflows, whereas deficit in capital account arises when capital inflows are lesser than capital outflows.” |