The Balance of Payments (BOP) is a systematic record of all economic transactions between the residents of a reporting country and the rest of the world over a specific period, and it must always ___ in an accounting sense.

Answer: balance (or sum to zero)

The BOP follows the double-entry bookkeeping system. Therefore, the sum of the Current Account, the Capital Account, and the Financial Account, along with changes in official foreign exchange reserves, must mathematically equal zero. A deficit in the current account must be perfectly offset by a surplus in the capital/financial accounts or by drawing down forex reserves.