The U.S. balance of payments status may improve when

Question

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Political instability in other countries may cause investors to move their funds to safer havens, such as the United States, which would improve the U.S. balance of payments status. The other choices are unlikely to improve the balance of payments status: A) a higher inflation rate would decrease U.S. competitiveness and increase imports, worsening the balance of payments; C) a fall in the demand for U.S. products would decrease exports, also worsening the balance of payments; D) an increase in foreign aid spending would worsen the balance of payments, as it would be an outflow of funds from the U.S.

The US Balance of Payments Status May Improve When