A current account surplus for a country means that a. The country earns more than it...
A current account surplus for a country means that
a. The country earns more than it spends.
b. The country saves less than its domestic investment.
c. The country’s private sector saves more than the government.
d. The country imports more goods and services than it exports.
Homework Answers
a.country earns more than it spends.
option a is correct.
Current account measures the country exports net income and direct payments on one hand.
From the above total, the amount of imports and expenses paid to foreign countries will be reduced.
If the current account balance is positive it means that country earns more than it spends.
If the current account balance is negative it means that country spends more than its earns.
Current account surplus does not mean that country saves less than its domestic investment or private sector saves more than government (so b and c are not correct).
If country imports more than its exports it will result in negative trade balance.(so d is not correct)
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