To pay for a current account deficit, a country can
A) borrow money from abroad.
B) lend money abroad.
C) increase official reserves to cover the shortfall.
D) transfer money from the capital account to the official settlements account.

Question

Quizplus · Accepted Answer

A country can finance a current account deficit by borrowing money from abroad, which involves attracting foreign capital to cover the shortfall.

To Pay for a Current Account Deficit, a Country Can