In 2001 the United States posted a current account deficit of -$393 billion. The bulk of the negative value came from
A) a net transfer deficit.
B) an income balance deficit.
C) a goods trade deficit.
D) an income trade deficit.

Question

Quizplus · Accepted Answer

A goods trade deficit occurs when a country imports more goods than it exports. Since the US had a large trade deficit in 2001, it is reasonable to assume that this was the primary source of the current account deficit. The other options, such as net transfer deficit or income balance deficit, are less likely to explain the large deficit on their own.

In 2001 the United States Posted a Current Account Deficit