When Current Account Deficits Are Used to Finance Investment Spending

question 39

Multiple Choice

When current account deficits are used to finance investment spending, such deficits may be self-correcting because

• A)the resulting increase in the capital stock over time shifts the output demand curve to the right.
• B)interest rates decline.
• C)the resulting increase in national indebtedness increases labour demand.
• D)they promote more responsible government policies.
• E)the resulting increase in the capital stock over time shifts the output supply curve to the right.

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Definitions:

Strategic Decision

A significant choice made after careful consideration, often affecting the overall direction of an organization.

Flexible Leadership Theory

A leadership approach that emphasizes adaptability and the ability to adjust leadership styles and strategies based on changing circumstances.

Strategic Objectives

Long-term goals set by an organization to guide its direction and resource allocation in pursuit of its mission and vision.

Strategic Leadership

A management style that involves decision-making and guidance from the top of the organization to achieve long-term business strategies and objectives.