A nation wishing to reduce its current account deficit would be advised to ?
Correct answer: D. decrease domestic consumption
- A. engage in more government spending
- B. reduce government taxes
- C. increases private investment spending
- D. decrease domestic consumption
Explanation
Reducing domestic consumption generally lowers spending on imported goods and services, which improves the current-account balance. More government spending, lower taxes or higher private investment may instead increase demand for imports.
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