Answer:
A. It must show a surplus in its capital account.
Explanation:
A deficit can be defined as an amount by which money, falls short of its expected value.
In Financial accounting, deficit is usually as a result of revenue falling below expenses or expense exceeding revenue at a specific period of time.
For instance, if in a country liabilities exceeds assets or import exceeds export there would be a deficit in the financial account of the country.
Generally, a deficit on the current account of a country leads to a surplus on the financial and capital account. This is simply as a result of a country having to import more goods and services than it is exporting to other countries in trade.
Hence, if a country has a current account deficit, it must show a surplus in its capital account.
In conclusion, a deficit on the current account is because the value of goods and services exported is lower than the value of goods and services being imported in a particular country.
