When a country has a current account balance deficit,the country
A) always has a large government budget deficit.
B) is always borrowing from abroad.
C) is always lending abroad.
D) always has a large government budget surplus.
E) is always borrowing from domestic residents.

Question

Quizplus · Accepted Answer

When a country has a current account balance deficit, it means that it is importing more than it is exporting, and therefore needs to borrow from abroad to finance the difference. This does not necessarily mean that the country has a large government budget deficit or is always lending or borrowing from domestic residents.

When a Country Has a Current Account Balance Deficit,the Country