A current account deficit in a country's balance of payments means that
Correct answer: A. Payments for current transactions exceed receipts
- A. Payments for current transactions exceed receipts
- B. Official reserves always rise by the same amount
- C. The financial account must show a deficit
- D. The country has no foreign exchange earnings
Explanation
A current account deficit means that current payments, including imports and income payments, exceed current receipts. It may be financed by financial inflows, so it does not automatically imply a financial account deficit.
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The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
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