In order to finance the U.S.current account deficit,we must

A) increase the income tax rate.
B) increase government spending.
C) run a surplus in the capital account.
D) decrease the income tax rate.

Running a surplus in the capital account would mean that the U.S. is receiving more investment income and other financial inflows from foreign countries than it is sending out. This would help to finance the current account deficit, which is the difference between the value of goods and services that the U.S. imports and exports. Increasing income tax rates or government spending could potentially lead to a reduction in economic growth and would not directly address the current account deficit. Decreasing income tax rates might stimulate economic activity but would also lead to a reduction in government revenue, which could exacerbate the deficit.