ECONOMICS
BALANCE OF TRADE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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True
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False
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Either A or B
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None of the above
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Detailed explanation-1: -A current account surplus means an economy is exporting a greater value of goods and services than it is importing. A country with a current account surplus will have a deficit on the financial/capital account.
Detailed explanation-2: -Key Takeaways. Current account surpluses refer to positive current account balances, meaning that a country has more exports than imports of goods and services. Countries with consistent current account surpluses face upward pressure on their currency.
Detailed explanation-3: -A country with trade deficit cannot have current account surplus in its Balance of Payments.
Detailed explanation-4: -A current account deficit indicates that a country is importing more than it is exporting. Emerging economies often run surpluses, and developed countries tend to run deficits. A current account deficit is not always detrimental to a nation’s economy-external debt may be used to finance lucrative investments.