Which of the following is TRUE 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 typically leads to a depreciation of the currency, which can make exports cheaper and imports more expensive, potentially increasing the current account balance.

Which of the Following Is TRUE of the Current Account