Suppose the Current Account of a Country Is in Balance

Multiple Choice

Suppose the current account of a country is in balance and the official settlements account equals zero. A new transaction occurs so that the current account is now in surplus, but the official settlements account does not change. From this we know that

A) the balance of trade is now in surplus.
B) the government is running a budget deficit.
C) the capital and financial account is now in deficit.
D) the government must make official reserve transactions.