Which of the following is true of a current account surplus?
A) A country that is running a current account surplus will have negative net exports.
B) A current account surplus is consistent with domestic spending being in excess of domestic production.
C) A current account surplus means that a country is also running a net surplus in its financial account.
D) A country can have a current account surplus only if it exports more services as compared to goods.
E) A country that is running a current account surplus buys more bonds from the rest of the world as compared to what it sells.

Question

Quizplus · Accepted Answer

A current account surplus indicates that a country is exporting more than it is importing, which can include goods, services, and income flows. This surplus means the country is a net lender to the rest of the world, often reflected in buying more foreign assets, including bonds, than it sells. Choices A, B, C, and D are incorrect because they either misrepresent the nature of a current account surplus or make overly specific claims not inherently true about all current account surpluses.

Which of the Following Is True of a Current Account