Which of the following occurs in a country's balance of payments when a country exports more goods and services and receives more income from abroad than it imports and pays abroad?
A) current account deficit
B) capital account surplus
C) current account surplus
D) capital account deficit

Question

Quizplus · Accepted Answer

When a country exports more goods and services than it imports, it leads to a surplus in the current account of the balance of payments. This means that the country is receiving more income from abroad than it is paying abroad. A capital account surplus refers to an increase in foreign investment and is not related to the trade balance. Current account deficit and capital account deficit refer to situations where a country is importing more than it is exporting or is losing more capital than it is gaining from foreign investment, respectively.

Which of the Following Occurs in a Country's Balance of Payments