If a nation has a balanced current account and its net external wealth is positive:
A) it is a net debtor and payment flows are negative.
B) it is a net creditor and payment flows are positive.
C) it is in balance and its payment flows are zero.
D) it has liabilities greater than assets.

Question

Quizplus · Accepted Answer

A balanced current account means that the country's exports and imports are equal, indicating no deficit or surplus. A positive net external wealth means that the country's assets abroad are greater than its liabilities to foreigners. This makes the country a net creditor, with payment flows being positive as it is receiving more from its investments abroad than it owes to foreigners.

If a Nation Has a Balanced Current Account and Its