Which of the following statements best describes the relationship between the capital and the current account?

Question

Quizplus · Accepted Answer

A current account deficit indicates that a country is importing more goods, services, and capital than it is exporting. To finance this deficit, the country must attract foreign capital, often by selling domestic assets to foreign interests. This does not necessarily mean the capital account will be in deficit or surplus in direct correlation with the current account, nor does it imply that increasing exports is the immediate solution to a current account deficit.

Which of the Following Statements Best Describes the Relationship Between