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:

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