Which of the following statements is true?
A) A positive balance on capital account necessarily implies a positive balance on current account.
B) A negative balance on capital account necessarily implies a negative balance on current account.
C) A positive balance on capital account necessarily implies growing U.S. foreign investments.
D) A negative balance on capital account necessarily implies a positive balance on current account.

Question

Quizplus · Accepted Answer

A negative balance on capital account means that more money is leaving the country than coming in, which can be offset by a positive balance on current account - meaning the country is exporting more goods and services than it is importing, resulting in a net inflow of funds.

Which of the Following Statements Is True