Larger fiscal deficits in USA in the recent past lead to:
A) appreciation of US dollar.
B) capital account surplus in USA.
C) current account deficit in USA.
D) current account deficit in China.

Question

Quizplus · Accepted Answer

Larger fiscal deficits in the USA often lead to a current account deficit because the country needs to borrow more from abroad to finance its spending, increasing the demand for foreign currency and goods, which in turn affects the balance of payments.

Larger Fiscal Deficits in USA in the Recent Past Lead