When the United States has a current account deficit, it must

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When the United States has a current account deficit, it means it is importing more goods and services than it is exporting. This leads to a shortfall in the balance of payments, which must be balanced by capital inflows from foreign countries. These capital inflows can come in the form of foreign investment, purchase of US assets or stocks, or borrowing from foreign governments or banks. Therefore, the best choice is D, which states that the deficit must be balanced with capital inflows from foreign countries. The other options, such as buying bonds from foreign countries or reducing net transfers, do not directly address the need for capital inflows to balance the account. Selling more exports may help to reduce the deficit, but it is not always feasible or practical in the short term.

When the United States Has a Current Account Deficit, It