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) 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 often corresponds with a surplus in the current account, as the country is lending more to the rest of the world than it is borrowing.

A Negative Balance in the Capital and Financial Account Suggests