Recall the Application about the factors which allow the United States to continue to run large current account trade deficits with the rest of the world to answer the following question(s). The 2006 Economic Report of the President addressed the issue of whether the United States can continue to run large current account deficits. The report stated that the current account deficits would eventually be reduced and highlighted a number of factors that suggested the deficits could continue for a long period of time.
-According to this Application, if the United States is running a current account deficit, it must also have

Question

Quizplus · Accepted Answer

When a country runs a current account deficit, it means that it is importing more goods and services than it is exporting. In order to pay for these imports, the country must either sell assets to foreign investors or borrow money from them. This creates a financial account surplus, which is the opposite of a current account deficit. Therefore, the correct choice is B, a financial account surplus.

Recall the Application About the Factors Which Allow the United