The case of New Zealand, described in the text, concludes that a country's current account deficits are NOT sustainable if a country's
A) prospects for long-term economic growth are above its global deficit growth.
B) ability to sustain current account deficits is questionable.
C) unproductive industrial sectors and its prospects for long-run growth.
D) labor productivity is below that of most other countries.
E) exchange rate has fallen relative to other currencies.

Question

Quizplus · Accepted Answer

The text explicitly states that "New Zealand’s repeated current-account deficits made many wonder whether they were sustainable," indicating that a country's ability to sustain current account deficits is questionable.

The Case of New Zealand, Described in the Text, Concludes