Question : If a country receives more income from its foreign investments than it pays to foreign investors, it will have a:
Option 1: Current account surplus
Option 2: Current account deficit
Option 3: Capital account surplus
Option 4: Capital account deficit
Correct Answer: Current account surplus
Solution : The correct answer is (a) Current account surplus.
The income from foreign investments, such as dividends and interest, is recorded in the current account of the Balance of Payments. When a country receives more income from its foreign investments (inflows) than it pays to foreign investors (outflows), it results in a current account surplus. This indicates that the country is earning more from its overseas investments than it is paying out to foreign investors.
Question : If a country experiences a decrease in its foreign exchange reserves, it indicates:
Question : If a country experiences an increase in its foreign exchange reserves, it indicates:
Question : When a country experiences a surplus in its current account, it means that:
Question : When a country experiences a surplus in its capital account, it means that:
Question : Which of the following is not a type of balance of payments surplus or deficit?
Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile