Asked by Hloni Nkolanyane on May 19, 2024
Verified
Which of the following transactions will decrease the U.S.current account deficit?
A) A U.S.corporation builds a new factory in Seoul,South KoreA.
B) Dutch tourists visiting Los Angeles.
C) U.S.department stores buy shoes from Italy.
D) American firms invest in Tokyo real estate.
E) U.S.tourists travel in Canada.
Current Account Deficit
A situation in which a country's total imports of goods, services, and transfers are greater than the country's total export.
Dutch Tourists
Refers specifically to travelers from the Netherlands who visit other countries for leisure, business, or other purposes.
- Gain insight into the workings of current account deficits and surpluses and how they affect the financial stability of a nation.
Verified Answer
NI
Nawshaba IslamMay 25, 2024
Final Answer :
B
Explanation :
Dutch tourists visiting Los Angeles will spend money in the U.S., which counts as an export of services, increasing the U.S. current account balance.
Learning Objectives
- Gain insight into the workings of current account deficits and surpluses and how they affect the financial stability of a nation.