What accounted for much of policymakers' concern over U.S. current account deficits in the 1980s and 1990s?
A)The current account deficits were thought to be largely responsible for the federal budget deficit.
B)Current account deficits lower U.S. interest rates, thereby leading to reduced domestic saving.
C)Current account deficits require the United States to borrow funds from foreign savers.
D)The United States had signed international agreements in which it had pledged not to run a current account deficit for more than three years in a row.

Question

Quizplus · Accepted Answer

Policymakers were concerned over U.S. current account deficits in the 1980s and 1990s because such deficits require the United States to borrow funds from foreign savers. This can lead to a dependence on foreign investors and potentially reduce the country's economic power and sovereignty.

What Accounted for Much of Policymakers' Concern Over U