In almost all cases,a country's current account and financial account:
A)Fluctuate at random
B)Are inverse of one another
C)Have a direct relationship
D)Are always growing simultaneously
E)Are always shrinking simultaneously

Question

Quizplus · Accepted Answer

The current account and financial account in a country's balance of payments typically have an inverse relationship. When a country has a surplus in its current account, it means it is exporting more than it is importing, and thus, it is a net lender to the rest of the world. This surplus is balanced by a deficit in the financial account, where the country invests more abroad than foreign entities invest in the country. Conversely, a current account deficit, where a country imports more than it exports, is financed by a surplus in the financial account, indicating more foreign investment into the country than its investments abroad.

In Almost All Cases,a Country's Current Account and Financial Account