If the current account deficit indicates a problem with savings,a good way to deal with it is to:

Question

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Decreasing the government's budget deficit can help address the savings problem that contributes to the current account deficit. If the government spends less and reduces its borrowing, it can free up resources for private investment and savings. This can help boost the country's overall savings rate and reduce dependence on foreign borrowing, ultimately improving the current account balance. Options A and B are counterproductive as they would likely exacerbate the problem by reducing trade and investment inflows. Option C is also not a solution and is merely avoiding the problem.

If the Current Account Deficit Indicates a Problem with Savings,a