If the United States Has a Current Account Deficit and the Capital

question 178

Multiple Choice

If the United States has a current account deficit and the capital account is zero,which of the following must be true?

• A)The balance on the financial account must equal the balance on the current account.
• B)Net foreign investment must be negative as well.
• C)Domestic private saving must be less than net foreign investment.
• D)Domestic public saving must be less than net foreign investment.

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Definitions:

Overhead

The ongoing business expenses not directly attributed to creating a product or service, such as rent, utilities, and administrative costs.

Lowest Terms

The equivalent ratio having the smallest possible integers for its terms.

Division

A mathematical operation where one quantity is divided by another, resulting in a quotient and sometimes a remainder.

Administration Fee

A fee charged by an entity for the management services it provides.