In order to reduce its current account deficit,the United States must do which of the following?

Question

Quizplus · Accepted Answer

Reducing the federal budget deficit (A) can help reduce the deficit in the current account by decreasing the amount of borrowing required by the government, which reduces the demand for foreign capital. Raising the national product relative to national spending (B) can increase exports and decrease imports which helps to decrease the deficit in the current account. Increasing savings relative to domestic investment (C) can decrease the demand for foreign capital which can often lead to a decrease in the current account deficit. Therefore, all of the above options (D) are necessary to reduce the current account deficit in the United States.

In Order to Reduce Its Current Account Deficit,the United States