When a Country Runs a Current Account Deficit to Finance

question 36

Multiple Choice

When a country runs a current account deficit to finance an increase in domestic investment expenditures,it causes

• A) taxes to rise.
• B) an increase in capital stock and future productive capacity.
• C) consumption smoothing over time.
• D) a government deficit to occur.
• E) the real interest rate to increase.

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Definitions:

Anterograde Amnesia

A loss of the ability to create new memories after the event that caused the amnesia, leading to a partial or complete inability to recall the recent past.

Implicit

Something that is understood or implied without being directly stated or explicitly mentioned.

Explicit

Information or material that is clearly and directly expressed or demonstrated, leaving no room for confusion or doubt.

Automatic Processing

The unconscious encoding of incidental or well-practiced information, such as space, time, frequency, and the meaning of words.