Current Account Deficits May Not Be Undesirable for the Domestic

question 28

Multiple Choice

Current account deficits may not be undesirable for the domestic economy as it

• A) leads to more government spending.
• B) leads to lower interest rates.
• C) helps domestic consumers to smooth consumption over time.
• D) causes the domestic currency to appreciate.
• E) leads to lower taxes.

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Definitions:

Conversational Tone

Involves a style of communication that is informal, natural, and engaging, resembling everyday conversation.

Confidence

A state of being certain about the truth of something or feeling secure in one's abilities, qualities, and judgment.

Correctness

Accuracy or conformity to rules, standards, or truth.

Clarity

The quality of being clear, understandable, and free from ambiguity.