If a country consistently realizes a current account surplus in its balance-of-payments, it likely will become a net debtor in its balance of international indebtedness.

Question

Quizplus · Accepted Answer

If a country consistently realizes a current account surplus, it means that it is selling more goods and services than it is buying from abroad, resulting in a net inflow of foreign currency. This leads to an accumulation of foreign assets, which can be used to pay off international debt, and therefore it does not necessarily mean the country will become a net debtor. However, if the country uses these inflows to finance domestic consumption or investment, it may lead to increased international borrowing and ultimately, a net debtor position.

If a Country Consistently Realizes a Current Account Surplus in Its