The United States is called a debtor nation because
A)it has a large current account deficit that is simultaneously funded by foreign investment.
B)it has a large financial account deficit that is used to fund the current account deficit.
C)it has a large balance of payments deficit that is used to fund the current account deficit.
D)U)S.capital outflows are much greater than U.S.capital inflows.
E)U)S.households finance the majority of their purchases using credit cards (debt).

Question

Quizplus · Accepted Answer

A debtor nation is one that owes money to other countries, and the United States fits this description because it has a large current account deficit. This means that the country is importing more goods and services than it is exporting, resulting in a net outflow of money to other countries. To fund this deficit, the United States relies on foreign investment, which adds to its overall debt.

The United States Is Called a Debtor Nation Because