Hsc Mc??? (1 Viewer)

[kat_in_a_hat88]

Can someone please explain why this is the answer to the MC question...

Q:Which of te following would indicate that Australia's capital and financial account is in surplus?

A: An increase in Aus' CAD

I thought it would have been When Aus' ledning to OS exceeds Aus' borrowing from OS

Cheers.

 

[holla back girl]

no...its not a
if aus was lending more than its borrowing...then our net income account would not be in deficit this will actually improve our cad.

the capital account is in surplus because we're selling off assets and shares to fund our cad

 

[Haku]

a worsening of CAD means that we import more than we export. To fund this we need foreign investment both equity borrowing and loan borrowing. This generate a surplus of cash in the capital and financial account.

 

[kat_in_a_hat88]

Ohhh but of course...thanks holla back girl and nosadness!