A current account surplus implies that ?
Correct answer: A. the country is a net lender to the rest of the world
- A. the country is a net lender to the rest of the world
- B. the country is running a net capital account surplus
- C. foreign investment in domestic securities is at very low levels
- D. All of the above
Explanation
A current account surplus means national saving exceeds domestic investment, leaving funds lent or invested abroad, so the country is a net lender. It does not necessarily imply a capital-account surplus or low foreign investment in domestic securities.
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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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