When a country realizes a deficit on its current account
A) its net foreign investment position becomes positive.
B) it becomes a net demander of funds from other countries.
C) it realizes an excess of exports over imports on goods and services.
D) it becomes a net supplier of funds to other countries.

Question

Quizplus · Accepted Answer

When a country realizes a deficit on its current account, it means that it is importing more goods and services than it is exporting, resulting in a net outflow of funds to other countries. As a result, the country becomes a net demander of funds from other countries to finance its current account deficit.

When a Country Realizes a Deficit on Its Current Account