By the mid-1980s, the United States was running large current account ________ and large capital account ________.

Question

Quizplus · Accepted Answer

The current account measures the balance of trade in goods and services, while the capital account measures the flow of investment in and out of a country. A current account deficit means that a country is importing more than it is exporting, while a capital account surplus means that more money is flowing into the country than out of it. The opposite is true for a current account surplus and a capital account deficit. Therefore, the correct choice is A, as the United States was importing more than it was exporting and receiving more investment than it was sending out during the mid-1980s.

By the Mid-1980s, the United States Was Running Large Current