A current account deficit means that a country may ?
Correct answer: A. reduce its stock of foreign assets
- A. reduce its stock of foreign assets
- B. increase its stock of foreign assets
- C. increases its savings
- D. increases its foreign currency reserves
Explanation
A current-account deficit means the country is spending more abroad than it earns from current transactions and must finance the gap. It may do so by selling or reducing its stock of foreign assets, or by borrowing from abroad.
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