The most effective way to reduce our current account deficit would be to

Question

Quizplus · Accepted Answer

The merchandise trade deficit refers to the difference between the value of our imports and exports of goods. This is the largest component of our current account deficit. Thus, by lowering our merchandise trade deficit through policies such as promoting exports, reducing imports, and negotiating better trade deals, we can effectively reduce our overall current account deficit. Lowering the service trade deficit or raising/lowering the capital account surplus may have some impact on the current account deficit but will not be as effective as reducing the merchandise trade deficit.

The Most Effective Way to Reduce Our Current Account Deficit