Ceteris paribus,an increase in the government's budget deficit will increase the current account deficit.

Name: Ceteris paribus,an increase in the government's budget deficit will increase the current account deficit.
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Question

Quizplus · Accepted Answer

An increase in the government's budget deficit typically leads to higher demand for goods and services, which in turn leads to an increase in imports. This causes the current account deficit to increase, as the country is importing more than it is exporting.

Ceteris Paribus,an Increase in the Government's Budget Deficit Will Increase