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Current account surplus means your countries saving exceed investments in your countries. Whech means your country is a net lender with the rest of the world. It also means your balance of payments is essential on the credit side in the current account and debit side in the financial account. This brings advantages such as usually appreatiation of the currency, balance of trade surplus ( high amount of exports), and usually buying leverage in other countries but there are alot of factor and variables in the foreign exchange market that can effect currency. I know for sure thou that a trade surplus and defcit are neither good or bad and eventually have to reverse.
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Why is a current account surplus equivalent to foreign investment?
A country where income is greater than spending, has saving greater than investment, and a current account surplus. The excess of income over spending must be balanced by foreign investment, so there will be a financial account deficit to match the current account surplus.
What does exporting more than you import?
Trade Defict * * * * * The exact opposite! It is a SURPLUS on the current account of the balance of payments.
A country that persistently runs a current account surplus is living below its means while if it runs a persistent deficit it is living beyond its means Discuss?
A current account surplus signifies that the country is exporting more than importing or it is supplying more to the world than it takes from other countries. The current account surplus country is NOT consuming all its production, hence living below its means. On the other hand, a country running a persistent deficit in its current account is a net importer and paying more than it is producing, hence living beyond its means. Arun Goel
What is the relationship between capital account balance and current account balance?
The balance of payments, then, is the sum of the balance on current account and the balance on capital and financial account. It is important to understand that the deficit indicated by the current account is financed through activities recorded on the capital and financial account. The deficit on the current account must be exactly offset by the surplus on the capital and financial account (if it is not, net errors and omissions will correct it). This means then that the sum of the current account and the capital and financial account is equal to zero.
Why balance of payment is always balanced?
balance of payments consists two accounts namely current account and capital account. The current account deals with import of visible and invisible items and unilateral transfers. a surplus in this accounts makes a country's BOP a surplus and a deficit in this accounts indicates that the country's BOP is deficit. The capital account indicates the capital movements of that country with other countries. it also shows the countries gold and other reserves. a surplus and a deficit in the current accounts increases and decreases the reserve and so the balance of payments is equalised always. so when we say that BOP is deficit we mean only the current account in the BOP. because BOP will always be equalised.
Why is a current account surplus equivalent to foreign investment?
A country where income is greater than spending, has saving greater than investment, and a current account surplus. The excess of income over spending must be balanced by foreign investment, so there will be a financial account deficit to match the current account surplus.
What does a nation have when it spends less then its income?
A surplus on the current account of its balance of payments (and a matching deficit on the capital account). These are not to be confused with fiscal surplus or budgetary surplus since they are concerned with only Government expenditure and Income. And the correct word is "than" not "then".
What are the advantages and disadvantages of current account deposits?
check
What are the advantages of having a current bank account?
There are many advantages to having a current bank account. Bank accounts make it possible to deposit or cash checks. They are also very convenient when you have a Debit Card for the account.
What do you mean by surplus account?
A surplus account is the accumulation of undivided profits.
Debt of Latvia?
Latvia's current account which had been in deficit by 27% in late 2006 was surplus in 2010
What are the advantages of a current account?
you can't overdraw e.g get into dept.
What does exporting more than you import?
Trade Defict * * * * * The exact opposite! It is a SURPLUS on the current account of the balance of payments.
What do you do with a escrow account that has a surplus?
A simple escrow account that has a surplus at the end of year has the surplus carried over. Many times, the payment to the account is reduced to make the account even again.
A country that persistently runs a current account surplus is living below its means while if it runs a persistent deficit it is living beyond its means Discuss?
A current account surplus signifies that the country is exporting more than importing or it is supplying more to the world than it takes from other countries. The current account surplus country is NOT consuming all its production, hence living below its means. On the other hand, a country running a persistent deficit in its current account is a net importer and paying more than it is producing, hence living beyond its means. Arun Goel
What is the relationship between capital account balance and current account balance?
The balance of payments, then, is the sum of the balance on current account and the balance on capital and financial account. It is important to understand that the deficit indicated by the current account is financed through activities recorded on the capital and financial account. The deficit on the current account must be exactly offset by the surplus on the capital and financial account (if it is not, net errors and omissions will correct it). This means then that the sum of the current account and the capital and financial account is equal to zero.
Why balance of payment is always balanced?
balance of payments consists two accounts namely current account and capital account. The current account deals with import of visible and invisible items and unilateral transfers. a surplus in this accounts makes a country's BOP a surplus and a deficit in this accounts indicates that the country's BOP is deficit. The capital account indicates the capital movements of that country with other countries. it also shows the countries gold and other reserves. a surplus and a deficit in the current accounts increases and decreases the reserve and so the balance of payments is equalised always. so when we say that BOP is deficit we mean only the current account in the BOP. because BOP will always be equalised.
