A Deficit in a Country's Current Account Means That

question 78

Multiple Choice

A deficit in a country's current account means that:

• A) the country is running a net deficit in its financial account.
• B) the country is a net lender to the rest of the world.
• C) the country is running a net surplus in its financial account.
• D) the country will have a positive value of net exports.
• E) the domestic production is in excess of domestic spending.

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Definitions:

Cash Received

The total amount of cash a company collects from its various sources, including operations, financing, and investing activities, during a period.

Indirect Method

A method of computing the net cash provided by operating activities that starts with net income and adjusts it to a cash basis.

Operating Activities

These are the day-to-day actions that are involved in running a business which affect the cash flow but are not investing or financing activities.

Investing Activities

These activities generate cash inflows and outflows related to acquiring or disposing of noncurrent assets such as property, plant, and equipment, long-term investments, and loans to another entity.