How do current account and capital/financial account interact in the balance of payments?

How do current account and capital/financial account interact in the balance of payments?

• A. They are separate and independent
• B. The current account records trade in goods/services, income, and transfers; the capital/financial account records financial capital flows. The two together reflect a country’s net lending or borrowing internationally; deficits or surpluses in one are offset by the other.
• C. Only the current account matters
• D. The capital account sets exchange rates

Answer: (B)