A negative balance in the capital and financial account suggests that a country
A) is realizing a surplus on its current account.
B) is realizing a deficit on its current account.
C) is borrowing from the rest of the world.
D) imports more goods and services than it exports.

Question

Quizplus · Accepted Answer

A negative balance in the capital and financial account indicates that a country is experiencing a net outflow of capital, which typically corresponds to a surplus in the current account, as the country is exporting more goods and services than it imports, or receiving more income and transfers than it pays out.

A Negative Balance in the Capital and Financial Account Suggests