A current account surplus is favored over a deficit. If a country is faced with a current account deficit it would have to ________ in order to support this situation.
A) borrow from the IMF
B) sell assets to foreigners
C) divest stock in domestic corporations
D) purchase stocks, bonds, and real estate in other countries
E) issue negotiable instruments like bills of exchange

Question

Quizplus · Accepted Answer

A current account deficit means a country is importing more than it is exporting, leading to a net outflow of domestic currency to foreign markets. To balance this, the country may need to sell assets to foreigners to bring foreign currency into the country.

A Current Account Surplus Is Favored Over a Deficit