A current account deficit exists when

Question

Quizplus · Accepted Answer

A current account deficit exists when a country imports more goods and services than it exports, leading to a trade deficit. This means that financial flows out of the country for goods and services is greater than financial flows into the country for its goods and services. Option A is incorrect, as a positive net export would mean that the country is exporting more than it is importing, leading to a current account surplus. Option B is incorrect, as it describes a situation where the country is experiencing a current account surplus. Option D is incorrect, as it describes a situation where the country is exporting more than it is importing, leading to a current account surplus.

A Current Account Deficit Exists When