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:

Fossil Primates

Prehistoric members of the primate order found as fossils, which provide insights into the evolution and development of modern primates, including humans.

Right-Handed

A preference for using the right hand for tasks and activities, which is the most common handedness in humans.

Left-Handed

The characteristic of using the left hand more naturally and effectively than the right for daily tasks and activities.

Same Species

Individuals belonging to the same species are capable of interbreeding and producing fertile offspring, sharing common genetic and biological characteristics.