The net flow of goods is associated with a net flow of financial assets in the opposite direction.

Question

Quizplus · Accepted Answer

This is based on the principle of balance of payments, where the current account (which includes the net flow of goods) is balanced by the financial account (which includes the net flow of financial assets). Therefore, if there is a surplus in the current account (more exports than imports), there will be a deficit in the financial account (more financial assets leaving the country than coming in), and vice versa.

The Net Flow of Goods Is Associated with a Net