What Are Three Primary Causes for Current Account Deficits

question 151

Multiple Choice

What are three primary causes for current account deficits?

• A) strong economic growth,lower personal savings rates,and fiscal policy
• B) strong investment,fiscal policy,and personal savings rates
• C) consumer preferences,trade barriers,and transportation costs
• D) trade deficit,consumer preferences,and fiscal policy
• E) a weak export market,increased consumer wealth,and monetary policy

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Definitions:

Internal Rate

Typically refers to the internal rate of return (IRR), a discount rate that makes the net present value (NPV) of all cash flows from a project or investment equal to zero.

Annual Cash Flows

The net amount of cash and cash-equivalents being transferred into and out of a business over a year.

Investment Costing

The process of determining the total costs associated with making an investment.

Direct Materials

Raw materials that can be directly traced to the manufacturing of a specific product.