Which of the following are true in terms of the current account balance?
A) Monetary expansion has no effect on the current account balance.
B) Monetary expansion decreases the current account balance.
C) Fiscal expansion increases the current account balance.
D) Fiscal expansion has no effect on the current account balance.
E) Monetary expansion increases the current account balance.

Question

Quizplus · Accepted Answer

Monetary expansion increases the money supply and lowers interest rates, making exports more competitive and stimulating demand for domestically produced goods, leading to an increase in the current account balance.

Which of the Following Are True in Terms of the Current