How Can Fiscal Policy Cause a Current Account Deficit

question 79

Multiple Choice

How can fiscal policy cause a current account deficit?

• A) Decreased government spending increases imports.
• B) Increased government borrowing attracts foreign investment funds.
• C) Increased government spending stimulates the economy and imports.
• D) Increased government spending causes higher domestic savings.
• E) Decreased government spending leaves room for foreign investment.

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