Let the Current Account Deficit Increase by $200 Billion

question 54

Multiple Choice

Let the current account deficit increase by $200 billion. Which of the following adjustments would maintain a suitable macroeconomic equilibrium?

• A) Private saving increasing by $100 billion and the federal deficit increasing by $100 billion
• B) Private saving increasing by $100 billion and the federal deficit falling by $100 billion
• C) Private saving falling by $100 billion and the federal deficit increasing by $100 billion
• D) Private saving falling by $100 billion and the federal deficit falling by $100 billion
• E) The federal deficit increasing by $200 billion with no change in private saving

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Definitions:

Intent to Convey

The legal determination or declaration of a party's intention to transfer rights, property, or interest from one to another.

Soil

The top layer of the Earth's surface, consisting of rock and mineral particles mixed with organic matter, which supports plant life.

Waters Contained

Bodies of water that are held or confined within a certain area, as in reservoirs, tanks, or naturally contained basins.

Assignee of a Lease

The party to whom lease rights and obligations are transferred, assuming the role of the original lessee.