When a Country Realizes a Deficit on Its Current Account

question 38

Multiple Choice

When a country realizes a deficit on its current account

• A) its net foreign investment position becomes positive.
• B) it becomes a net demander of funds from other countries.
• C) it realizes an excess of exports over imports on goods and services.
• D) it becomes a net supplier of funds to other countries.

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Definitions:

Quantity Demanded

The overall volume of a good or service that consumers intend and can afford to buy within a specific period at a particular price.

Complementary Good

A product or service that is typically used together with another product, such that an increase in demand for one leads to an increase in demand for the other.

Change in Demand

A change in the quantity demanded of a good or service at at least one price that is caused by factors other than a change in the price of that good or service.

Technology

The application of scientific knowledge for practical purposes, especially in industry, which includes machinery, equipment, methods, and processes.