A country running a current account surplus over many years is likely to see its exchange rate:
A) appreciate.
B) depreciate.
C) hold steady.
D) the rate can rise, fall, or hold steady; the current account and the exchange rate are not linked.

Question

Quizplus · Accepted Answer

In the long run, a country running a current account surplus indicates that it exports more goods and services than it imports. This creates a higher demand for the country's currency in the international market, which causes its exchange rate to appreciate.

A Country Running a Current Account Surplus Over Many Years