Asked by XxCloud StrifexX on May 18, 2024
Verified
A deficit in a country's current account balance occurs whenever
A) money outflows from the country exceed its money inflows.
B) money inflows into a country exceed its money outflows.
C) its currency falls in value relative to other currencies.
D) the country is alone in maintaining a strict gold standard.
Current Account Balance
A measure of a country's international financial position, reflecting the difference between its savings and its investment by tracking exports and imports of goods, services, and financial transfers.
Money Outflows
The movement of money out of a business, project, or investment, typically representing expenses or investments.
Money Inflows
Financial resources entering a specific area, system, or entity, such as the funds received by a business or economy from external sources.
- Evaluate the financial impacts of a nation's current account deficit or excess.
Verified Answer
AA
Aleesha ArmstrongMay 20, 2024
Final Answer :
A
Explanation :
A deficit in a country's current account balance occurs when its money outflows exceed its money inflows. This means that the country is spending more on imports, foreign investment, and other international transactions than it is earning from exports, foreign investment, and other sources. This can lead to problems such as a weakened currency, increased borrowing and debt, and reduced economic growth.
Learning Objectives
- Evaluate the financial impacts of a nation's current account deficit or excess.