Economic Theory Shows That the Current Account Deficit Is Always

question 18

Multiple Choice

Economic theory shows that the current account deficit is always equal to the capital account surplus.This means that

• A)the federal budget must always be in balance.
• B)when a country exports more goods and services than it imports, it also imports assets equal to the difference.
• C)current account deficits should be avoided.
• D)trade deficits tend to be eliminated automatically.

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Definitions:

Santa Costanza

An ancient church in Rome, Italy, known for its early Christian architecture and mosaics, architecturally significant as an example of a central plan structure.

Mausoleum of Galla Placidia

A renowned early Christian monument in Ravenna, Italy, known for its stunning mosaics, built in the 5th century as the final resting place for Galla Placidia.

Pantheon

An ancient Roman building known for its large dome and as a temple to all the gods of ancient Rome.

Tomb of the Julii

An ancient Roman mausoleum located north of St. Peter’s Basilica, known for its elaborate Christian mosaics.