Question

A deficit on the current account Multiple Choice means that a nation is making international transfers. has no relationship to the capital and financial account. normally causes a deficit on the capital and financial account. normally causes a surplus on the capital and financial account.

Answer 1

The correct option is C

Step-by-step explanation:

The deficit or shortage on the current account of the country, is defined as the measurement or determination of the trade of the company where the goods and the service value, it imports exceeds or increase the value of the products it exports.

The current account of the country states the foreign transactions of the country within the time period.

So, when there is deficit or shortage on the current account, it means that usually, it will cause deficit in the finance as well as the capital account of the country.