a real value of a nation's freely floating currency increases, and the nation's current account is initially zero, its capital account will most likely be

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When a nation's freely floating currency increases in value, it means that the currency has become more expensive relative to other currencies. This makes it more expensive for the nation to import goods and services, and cheaper for the nation to export goods and services. As a result, the nation's current account will move into surplus, as exports will exceed imports. To finance this surplus, the nation's capital account will also move into surplus, as foreign investors will be attracted to the higher-valued currency.

A Real Value of a Nation's Freely Floating Currency Increases