Question : When a country experiences a surplus in its current account, it means that:
Option 1: It is exporting more goods than it is importing
Option 2: It is earning more income from its foreign investments than it is paying out
Option 3: It is receiving more foreign aid than it is providing
Option 4: It is borrowing more from foreign sources than it is lending
Correct Answer: It is exporting more goods than it is importing
Solution : The correct answer is (a) It is exporting more goods than it is importing.
When a country experiences a surplus in its current account, it means that the value of its exports of goods and services exceeds the value of its imports. In other words, it is selling more goods and services to foreign countries than it is buying from them.
It is exporting more goods than it is importing: This is the correct answer. A surplus in the current account indicates that a country's exports of goods and services are greater than its imports.
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