A country that exports more than it imports will:
A) have a current account deficit and a capital account deficit.
B) have a current account surplus and a capital account surplus.
C) have a current account deficit and a capital account surplus.
D) have a current account surplus and a capital account deficit.

Question

Quizplus · Accepted Answer

When a country exports more than it imports, it means that its trade balance is positive. This leads to a surplus in the current account, which covers international transactions of goods and services, as well as income flows. On the other hand, if a country is exporting more than it imports, it may not need to borrow from foreign sources to finance domestic investment, so it may have a capital account deficit. Overall, a current account surplus and a capital account deficit would reflect a strong position in terms of international trade and investment.

A Country That Exports More Than It Imports Will