A country that is a net creditor
A) shows a deficit in its current account.
B) receives more tax revenue from its citizens than it returns in transfer payments.
C) lends more funds to foreigners than it borrows.
D) shows a surplus in its financial account.
E) sells more bonds to the rest of the world than it buys from the rest of the world.

Question

Quizplus · Accepted Answer

A net creditor is a country that lends more funds to foreigners rather than borrowing from them. This means that it has a surplus in its financial account, as it is receiving more income from its foreign assets than it is paying out to foreign liabilities. It does not necessarily have to show a deficit in its current account, receive more tax revenue from its citizens than it returns in transfer payments, sell more bonds to the rest of the world than it buys from the rest of the world, or any combination of these.

A Country That Is a Net Creditor