When a Country Realizes a Deficit on Its Current Account

question 25

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 imports over exports on goods and services
• D) It becomes a net supplier of funds to other countries

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Definitions:

Capital Stock

The total amount of physical and financial assets owned by a company, including buildings, machinery, and equity investments.

Interest Income

Income earned through the lending of money or from deposit funds in bank accounts and other financial instruments.

Long Span

A term typically referring to an extensive period or duration, often used in the context of construction (for structures with large distances between supports) or careers (lengthy professional life).

Saving Benefits

The advantages gained from setting aside income or resources for future use, including accruing interest, financial security, and preparedness for emergencies.