Question

If a nation has a surplus in its current account,​

1. it exports fewer goods than it imports

2. it exports more goods than it imports

3. the value of its currency should fall

4. the value of its currency should rise

	a.	​1 and 4
	b.	​2 and 4
	c.	​2 and 3
	d.	​1 and 3

Answer 1

The correct option is B i,e 2 and 4.

If a nation has a surplus in its current account means it exports more goods than it imports and the value of its currency should rise.

Current account surpluses refer to positive current account balances. A current account surplus will tend to boost domestic employment if: It is due to an improvement in competitiveness, leading to higher demand for exports. If domestic demand is still relatively strong, but consumers are buying domestic goods, rather than importing.