Final answer:
A capital account surplus means that capital inflows exceed outflows. This is separate from the trade balance, where a trade surplus would mean exports exceed imports and typically leads to an outflow of financial capital that can be invested internationally.
Step-by-step explanation:
If there is a capital account surplus, it means that the capital inflows into a country exceed the capital outflows. This concept is related to the balance of payments of a country, which includes the capital account. The capital account records the net change in ownership of national assets. A capital account surplus indicates a net influx of assets from the rest of the world, which can occur from various transactions such as foreign investment in domestic assets or loans received from foreign entities.
In the context of trade, a trade surplus implies that a country is exporting more goods and services than it is importing. This leads to an accumulation of financial capital domestically because the sale of exports brings in more capital than what goes out for imports. Consequently, with a trade surplus, there's typically an overall outflow of financial capital as the surplus capital can be invested abroad.
Therefore, if there is a capital account surplus, then that means that:
A) imports exceed exports - Incorrect, as this would likely lead to a trade deficit.
B) exports exceed imports - Incorrect in the context of capital account.
C) imports are equivalent to exports - Incorrect, as it does not pertain to the capital account directly.
D) capital inflows exceed outflows - Correct, as it directly describes a capital account surplus.