13 If Australia has a 30 billion current account deficit the

13. If Australia has a $30 billion current account deficit, then there must be a. net capital inflows of $30 billion. b. net capital outflows of -$30 billion. c. no capital inflows or capital outflows. d. an Australian Government budget surplus.

Solution

Option A.

Net capital inflows of$ 30 billion

Net capital inflow means net flow of capital in to a country.

It can be in the form of Increased purchases by foreigners or reduced holdings by the natives of that country.

Current account deficit is a measurement of country\'s trade where the value of imports exceeds exports