Statement I: The U.S.has a high productivity rate and the world's largest economy,so there is no reason to be concerned with the current account deficit.
Statement II: The U.S.should be concerned about its large current account deficit because eventually foreigners will stop wanting to accept U.S.dollars.

Question

Quizplus · Accepted Answer

While statement I is true that the U.S. has a high productivity rate and a large economy, statement II is also true. A large current account deficit means that the U.S. is borrowing heavily from other countries and if foreign investors lose confidence in the U.S. economy, they may not want to continue accepting U.S. dollars, leading to a weaker currency and potentially harmful economic consequences.

Statement I: the U