Question

Why might a current account surplus be an important economic objective for some countries?

Answer 1

Current account is the main part of BOP.

BOP refers to balance of payment that records all the economic transactionz related to the residents and rest of the world..BOP is divided into 2 parts..

1.Current account

2.Capital account.


Current account refers to that account which include following things i. e

+ Trade in Goods.
+ Trade in services
+Trade in transfers.

Trade of Goods refers to the buying and selling of goods between residents of the country and the rest of the world.

Trade of services refers to purchase and sale of services between residents and rest of the world.

Trade in Transfers refers to the capital transfer which is related to the capital receipts and capital payments..

If Current account shows surplus then it is most important as economic activity for many countries because it increases the export in the country and imports will be minimise. As a result business run very smoothly..

Answer 2

Answer:

A current account surplus means an economy is exporting a greater value of goods and services than it is importing. .

• In theory, you could expect a current account surplus (X-M) to boost employment because it is indicative of higher domestic demand. High exports (X) leads to increased employment in the export sector.