Complete Question:
A deficit on the current account:
Group of answer choices
a. normally causes a surplus on the capital and financial account.
b. normally causes a deficit on the capital and financial account.
c. has no relationship to the capital and financial account.
d. means that a nation is making international transfers.
Answer:
a. normally causes a surplus on the capital and financial account.
Step-by-step explanation:
A deficit can be defined as an amount by which money, falls short of its expected or required value.
Generally, deficit in financial accounting is usually as a result of expense exceeding revenue or revenue falling below expenses at a specific period of time.
For instance, when liabilities exceeds assets or import exceeds export there would be a deficit in the financial account.
A deficit on the current account normally causes a surplus on the capital and financial account. This is simply as a result of a country having to import more goods and services than it is exporting to other countries in trade.
Simply stated, a deficit on the current account ultimately implies that the value of goods and services exported is lower than the value of goods and services being imported in a particular country.