A current account surplus indicates that America is increasing its claims on foreign wealth, while a deficit indicates that this country is reducing its claims on foreign wealth.
What does Current Account Surplus indicate?
- A country is a net lender to the rest of the world if its current account balance is positive, or "current account surplus."
- One might compare a current account surplus to a current account deficit.
- A country with a positive current account balance, which indicates that it exports more goods and services than it buys, is said to be in a current account surplus.
- Current account surplus countries see upward pressure on their currencies.
- Current account surpluses may also be a sign of weak domestic demand or the outcome of a recession-related decline in imports.
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