A Current Account Deficit

question 95

Multiple Choice

A current account deficit

• A) will not pose a problem, especially if it is accompanied by an expansionary fiscal policy.
• B) may pose no problem if the borrowed funds are channeled into productive domestic investment projects that pay for themselves with the revenue they generate in the future.
• C) may still pose a problem, even if the borrowed funds are channeled into productive domestic investment projects.
• D) There is no relation between current account surplus and between savings and investment.
• E) will pose a problem because the country is borrowing funds from the rest of the world that it won't be able to pay back later.

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Definitions:

Working Memory Capacity

refers to the ability of an individual to hold and process a limited amount of information in the mind, where it can be used for cognitive tasks such as learning, reasoning, and comprehension.

Intelligence Test Scores

Quantitative measures obtained from assessments designed to evaluate intellectual capabilities and potential.

Correlation

A measure of the relationship between two variables, indicating how one may predict or relate to the other.

Working Memory

is a cognitive system with a limited capacity that is responsible for temporarily holding information available for processing, which is essential for reasoning, guidance of decision-making, and behavior.