A deficit in the current account implies
A) there is an excess demand in the foreign currency market.
B) a deficit in the capital account.
C) a surplus in the capital account.
D) nothing about the capital account.

Question

Quizplus · Accepted Answer

A deficit in the current account typically implies that there is a surplus in the capital account, as the country needs to finance the current account deficit by borrowing from abroad or attracting foreign investment.

A Deficit in the Current Account Implies