If the United States Has a Current Account Deficit and the Capital

question 178

Multiple Choice

If the United States has a current account deficit and the capital account is zero,which of the following must be true?

• A)The balance on the financial account must equal the balance on the current account.
• B)Net foreign investment must be negative as well.
• C)Domestic private saving must be less than net foreign investment.
• D)Domestic public saving must be less than net foreign investment.

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Definitions:

Anticline

An anticline is a geological fold with layers that curve upward, typically associated with areas of tectonic compression.

Folding

The bending of the Earth's crust which can create mountains and valleys as a result of tectonic forces.

Compression

In geology, compression refers to the force or stress that pushes materials together, leading to folding, faulting, or shortening in the Earth's crust.

Tension

The force applied on a material that stretches it apart, often leading to geological features such as rift valleys or the expansion of ocean basins at divergent boundaries.