A Current Account Deficit

question 95

Multiple Choice

A current account deficit

• A) will not pose a problem, especially if it is accompanied by an expansionary fiscal policy.
• B) may pose no problem if the borrowed funds are channeled into productive domestic investment projects that pay for themselves with the revenue they generate in the future.
• C) may still pose a problem, even if the borrowed funds are channeled into productive domestic investment projects.
• D) There is no relation between current account surplus and between savings and investment.
• E) will pose a problem because the country is borrowing funds from the rest of the world that it won't be able to pay back later.

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Definitions:

Inventory

The total amount of goods and materials held in stock by a business, including raw materials, work-in-progress, and finished goods.

Throughput

The rate at which a system or process produces goods or handles material, often measured within a specific time frame.

Operating Expenses

Costs associated with the day-to-day functioning of a business that are not directly tied to production, such as salaries and rent.

Production Processes

Refers to the sequence of activities or operations involved in transforming raw materials into finished goods.