
When current account deficits are used to finance investment spending,such deficits may be self-correcting because
A) they promote more responsible government policies.
B) the resulting increase in the capital stock over time shifts the output supply curve to the right.
C) the resulting increase in the capital stock over time shifts the output demand curve to the right.
D) the resulting increase in national indebtedness increases labour demand.
E) interest rates decline.
Correct Answer:
Verified
Q46: Absorption can be defined as
A) C +
Q47: The behavior of the current account deficit
Q48: In a two-good,two-period model with trade,an increase
Q49: The "savings glut" refers to
A) the large
Q50: In a two-good,two-period model with trade,an increase
Q52: In a two-good,two-period model with trade,an anticipated
Q53: In 2011,there was
A) large dispersion across countries
Q54: Current account deficits may not be undesirable
Q55: Absorption refers to
A) the quantity of imports
Q56: When a country runs a current account
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents