An Increase in a Country's Current Account Deficit

question 2

Multiple Choice

An increase in a country's current account deficit

• A)is desirable if it is caused by a reduction in the level of private saving.
• B)is desirable regardless of the cause of the change.
• C)might be desirable depending on the cause of the change.
• D)is not desirable if it is caused by an increase in domestic investment.
• E)is undesirable regardless of the cause of the change.

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Definitions:

Correlations

A measure that indicates the extent to which two or more variables fluctuate together.

Relationship

A connection, association, or involvement between individuals or entities based on emotions, business, or other forms of interaction.

Standard Deviation

A statistical measure that quantifies the amount of variation or dispersion of a set of data values, indicating how spread out the data points are from the mean.

Normally Distributed

A statistical term describing a bell-shaped distribution of data, where most values cluster around a central mean and probabilities for values taper off symmetrically towards the extremes.