What does it indicate when a country has a current account deficit?

Multiple choice question for The Balance of Payments. Select an option, then review the explanation below.

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It is providing more loans to foreign countriesIt is enjoying a surplus in its exports of goods and servicesIt is decreasing the amount it owes to other countriesIt is increasing its borrowing from foreign nations

Explanation

A current account deficit means a country is importing more goods, services, and capital than it is exporting, which results in the country borrowing more from abroad or increasing its debt to other nations.

Practice related questions from the same subject.

1.Which of the following statements about the balance of payments is accurate?
2.What term describes the difference between a nation's exports and imports of goods?
3.What is required to reconcile discrepancies in the balance of payments accounts?
4.What does the balance of trade specifically measure?
5.Which economic pattern is commonly observed in countries during the initial phases of rapid economic growth?

What does it indicate when a country has a current account deficit?

Explanation

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