Persistent Current Account Deficits Make Sense If

question 28

Multiple Choice

Persistent current account deficits make sense if

• A) the capital account surplus is reduced.
• B) government interest rates go down accordingly.
• C) if the associated foreign borrowing is used to finance increased productive capacity.
• D) if personal income taxes are reduced.
• E) if the government budgetary debt is not growing.

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Definitions:

Normal Probability Distribution

A bell-shaped distribution that is symmetric about the mean, showing that data near the mean are more frequent in occurrence than data far from the mean.

Standard Deviation

A framework for measuring the extent of divergence or distribution in a collection of quantities.

Probability Density Function

A function that describes the likelihood of a continuous random variable to take on a particular value.

Uniform Distribution

A type of probability distribution in which all outcomes are equally likely within a certain interval.