Let the current account deficit increase by $200 billion. Which of the following adjustments would maintain a suitable macroeconomic equilibrium?
A) Private saving increasing by $100 billion and the federal deficit increasing by $100 billion
B) Private saving increasing by $100 billion and the federal deficit falling by $100 billion
C) Private saving falling by $100 billion and the federal deficit increasing by $100 billion
D) Private saving falling by $100 billion and the federal deficit falling by $100 billion
E) The federal deficit increasing by $200 billion with no change in private saving

Question

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The Answer of Let the current account deficit increase by $200 billion. Which of the following adjustments would maintain a suitable macroeconomic equilibrium?
A) Private saving increasing by $100 billion and the federal deficit increasing by $100 billion
B) Private saving increasing by $100 billion and the federal deficit falling by $100 billion
C) Private saving falling by $100 billion and the federal deficit increasing by $100 billion
D) Private saving falling by $100 billion and the federal deficit falling by $100 billion
E) The federal deficit increasing by $200 billion with no change in private saving

Let the Current Account Deficit Increase by $200 Billion