Current account deficits may not be undesirable for the domestic economy as it

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Current account deficits can help domestic consumers to smooth consumption over time by allowing them to import more goods than they could afford with just their domestic resources. This can lead to a higher standard of living for consumers in the short term, although it may not be sustainable in the long term. Lower interest rates, a stronger domestic currency, more government spending, and lower taxes are not necessarily direct effects of current account deficits.

Current Account Deficits May Not Be Undesirable for the Domestic