A current account deficit implies that

Question

Quizplus · Accepted Answer

A current account deficit means that a country is importing more goods and services than it is exporting, resulting in a net outflow of funds to foreign countries. This gap is usually made up for by borrowing from abroad or selling off some of its assets. Option A is incorrect because it describes a current account surplus. Option C describes capital outflows instead of current account deficits. Option D is incorrect because a current account deficit would lead to a weaker currency, not a stronger one. Option E is an extreme answer and not necessarily true.

A Current Account Deficit Implies That