Homework Answers
Answer- Correct option is 'a'
A surplus in the financial account indicates buildup of debt either private or public or both. A financial account surplus means that the net ownership of a country's assets is flowing out of a country that is, foreign buyers are purchasing more domestic assets than domestic buyers are purchasing of assets from the rest of the world. A surplus on the financial account means that there are more investment funds flowing into the country than flowing out. These inflows may be to fund a deficit on the current account of the balance of payments.
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A surplus in the financial account indicates which of the following? build up...
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