Consider an Increase in a Country's Current Account Deficit

question 33

Multiple Choice

Consider an increase in a country's current account deficit.Which of the following statements best describes the desirability of this change?

• A)It is desirable regardless of the cause of the change.
• B)It is undesirable regardless of the cause of the change.
• C)It is not desirable if it is caused by an increase in domestic investment.
• D)It might be desirable depending on the cause of the change.
• E)It is desirable if it is caused by a reduction in the level of private saving.

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Definitions:

Life Cycle

The series of stages through which a living organism passes from the beginning of its life until its death.

Maternal Effect

Phenomena where the genotype of the mother directly influences the phenotype of her offspring, due to substances present in the egg.

Polarity

A property of molecules having distinct and opposite ends, leading to asymmetrical distribution of charges.

Embryonic

Pertaining to the embryo; the initial stages of development in multicellular organisms after fertilization.