If the U.S.current account balance is negative
A) the United States lends to other countries who purchase goods and services from the United States.
B) the United States borrows from other countries to pay for the goods and services that the United States buys from them.
C) the U.S. balance of international indebtedness shows that the United States is a net creditor nation.
D) the U.S. balance of international indebtedness shows that the United States is a net exporting nation.

Question

Quizplus · Accepted Answer

A negative current account balance means that the United States is importing more goods and services than it exports, which means that it is borrowing from other countries to finance these imports. Therefore, choice B is the best answer. Choices A and C are incorrect because they suggest that the United States is lending money to other countries, which is not the case with a negative current account balance. Choice D is incorrect because the balance of international indebtedness does not determine whether a country is a net exporter or not.

If the U.S.current Account Balance Is Negative