Everything else equal,if a country has exports of $15 billion and imports of $16 billion,it follows that the country has a ________.

Question

Quizplus · Accepted Answer

The difference between the value of a country's exports and imports is known as the balance of trade. If a country exports less than it imports, it means that it has a trade deficit, which is equivalent to a current account deficit. This means that the country is spending more on imports than it is earning from exports. On the other hand, if a country exports more than it imports, it has a trade surplus, which is equivalent to a current account surplus. When a country has a current account deficit, it might need to borrow capital from other countries, which leads to a financial account surplus. Conversely, a current account surplus could lead to a financial account deficit as the country may invest its surplus in other nations. In this case, as the country has exports of $15 billion and imports of $16 billion, it has a current account deficit and a financial account surplus. Therefore, option D is the correct answer.

Everything Else Equal,if a Country Has Exports of $15 Billion