When a country has a current account balance surplus, the country
A) always has a large government budget deficit.
B) is always lending abroad.
C) is always borrowing from abroad.
D) always has a large government budget surplus.
E) is always borrowing from domestic residents.

Question

Quizplus · Accepted Answer

A current account surplus means that the country is exporting more than it is importing, which results in a net inflow of foreign currency. This can be used to lend to other countries, as evidenced by the presence of a surplus. Therefore, choice B is the correct one.

When a Country Has a Current Account Balance Surplus, the Country