When a current account has a surplus of $5 billion,it means that
A)the capital account must have a deficit of $5 billion.
B)next exports must be negative.
C)net foreign lending is negative.
D)net acquisition of foreign assets is negative.

Question

Quizplus · Accepted Answer

By definition, a current account surplus means that a country is earning more from its exports of goods and services, plus net income from abroad, than it is paying out for imports and net income paid abroad. Therefore, the capital account, which measures the flow of financial resources between a country and the rest of the world, must have a deficit equal to the current account surplus in order to balance the overall balance of payments. In other words, the surplus on the current account must be financed by a net outflow of capital from the country.

When a Current Account Has a Surplus of $5 Billion,it