A Current Account Surplus Is Favored Over a Deficit

question 57

Multiple Choice

A current account surplus is favored over a deficit. If a country is faced with a current account deficit it would have to ________ in order to support this situation.

• A) borrow from the IMF
• B) sell assets to foreigners
• C) divest stock in domestic corporations
• D) purchase stocks, bonds, and real estate in other countries
• E) issue negotiable instruments like bills of exchange

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Definitions:

Commercial Banks

Financial institutions that offer a wide range of banking services to individuals and businesses, including deposit accounts, loans, and other services.

Efficient Market

A market in which asset prices fully reflect all available information, making it impossible to consistently achieve higher returns.

Investment Strategy

A plan for allocating assets among various investment types to achieve specific financial goals, taking into account the investor's risk tolerance and time horizon.

Liabilities

Financial obligations or debts that a company or individual owes.