When Australia has a current account surplus, we know that it is also: Group of answer choices running a balanced trade account. lending to the rest of the world. borrowing from the rest of the world. suffering from negative investment income. none of the above

To answer the question step by step:

1. Understand the Current Account: The current account is a component of a country's balance of payments. It includes the trade balance (exports minus imports of goods and services), net income from abroad (such as interest and dividends), and net current transfers (such as foreign aid).

2. Current Account Surplus: When a country has a current account surplus, it means that the value of its exports of goods, services, and transfers is greater than the value of its imports. Essentially, the country is earning more from the rest of the world than it is spending.

3. Implications of a Surplus:

   • Balanced Trade Account: This would mean that exports equal imports, which is not necessarily true in the case of a surplus.
   • Lending to the Rest of the World: A current account surplus implies that the country is saving more than it is investing domestically. These excess savings are often lent to other countries, meaning the country is a net lender.
   • Borrowing from the Rest of the World: This would be true if the country had a current account deficit, not a surplus.
   • Negative Investment Income: This would mean that the country is paying more in investment income to foreigners than it is receiving, which is not necessarily related to a current account surplus.

4. Conclusion: Given the above points, the correct answer is that when Australia has a current account surplus, it is lending to the rest of the world.

Therefore, the correct choice is:

• Lending to the rest of the world.