Concerning the balance-of-payments, a current account deficit results in a worsening of a country's net foreign investment position.

Question

Quizplus · Accepted Answer

A current account deficit means that a country is importing more than it is exporting, which means that it is borrowing from foreigners to finance its consumption. This results in an increase in the country's net foreign debt, which is a component of its net foreign investment position. Therefore, a current account deficit results in a worsening of a country's net foreign investment position.

Concerning the Balance-Of-Payments, a Current Account Deficit Results in a Worsening