Economists closely follow the current account balance because they believe it can provide information on the future movement of

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The current account balance is a measure of a country's total transactions with the rest of the world, including international trade in goods and services, investment income, and transfers. An overall surplus in the current account may increase demand for a country's currency, leading to appreciation and potentially higher exchange rates. Conversely, a deficit in the current account may lead to depreciation and potentially lower exchange rates. Therefore, economists closely follow the current account balance as it can provide information on the future movement of exchange rates.

Economists Closely Follow the Current Account Balance Because They Believe