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:

Self-Employment Taxes

Taxes paid by self-employed individuals, covering Social Security and Medicare taxes, based on net earnings from self-employment.

Ceiling Amount

A maximum limit placed on the value, income, or other financial metric that can be used for calculations, such as determining eligibility for tax deductions or credits.

Multi-Part W-3

A comprehensive summary form submitted by employers to the IRS, detailing total earnings, tax withholdings, and other payroll information for employees.

Social Security Portion

The part of income that goes towards Social Security contributions, typically seen on payroll statements.