True, False or Uncertain: If a country is running a current account deficit, then it is...

Question

Question

True, False or Uncertain: If a country is running a current account deficit, then it is...

True, False or Uncertain: If a country is running a current account deficit, then it is investing more than it saves. Briefly explain your answer.

business economics

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

When a country is running current account deficit thus, it means in the economy more money is going out and less money is brought into the economy. The current account can be calculated as follows

CA = (X - M) + NY + NCT

where, X = Total export

M = Total import

NY = net income from abroad

NCT = net current transfer.

When current account deficit is there it means level of export is less than the level of import.

In other words the country is paying more to foreigners and bringing less money from foreign nations.

Thus, the country is investing more abroad than saving at home.

Answer is True.

Please contact if having any query thank you.

Add a comment

Answer 2

Similar Homework Help Questions

If a country runs a surplus in financial account, its current account has a deficit. True,...

If a country runs a surplus in financial account, its current account has a deficit. True, false, or uncertain? Explain.
True or false: A larger current account deficit cannot occur unless the government budget deficit increases...

True or false: A larger current account deficit cannot occur unless the government budget deficit increases or households save less. Briefly explain your answer. Explain the results of a contractionary fiscal policy implemented in a fixed exchange rate regime economy
A current account deficit implies that the country is a net borrower with the rest of...

A current account deficit implies that the country is a net borrower with the rest of the world. the country is running a net capital account surplus. domestic investment in foreign assets is at very low levels. All of the above. explain pls

For this section, write whether the statements are True or False or Uncertain (if you say...

For this section, write whether the statements are True or False or Uncertain (if you say uncertain, have enough evidence to back your answer just as much as the true or false responses). Explain your answer and use diagrams where necessary. (a) A uniform monopolist has an upward sloping MC curve. Claim: A price ceiling set below the monopoly price will increase welfare more than monopoly profits. Assume no shut down of the monopoly. (b) A consumer with perfectly inelastic...
A current account surplus for a country means that a. The country earns more than it...

A current account surplus for a country means that a. The country earns more than it spends. b. The country saves less than its domestic investment. c. The country’s private sector saves more than the government. d. The country imports more goods and services than it exports.
True/False/Uncertain. For each question, answer “True” or “False” or “Uncertain” and explain your answer. (1) In...

True/False/Uncertain. For each question, answer “True” or “False” or “Uncertain” and explain your answer. (1) In any game between two firms that is repeated only once, the outcome will be perfect competition (P=MC). (2) Suppose that regulators decide to increase the gasoline tax by 25 cents per gallon to combat global warming. Then consumers will pay substantially more for every gallon of gas they purchase.

1. True, False or Uncertain: For each of the following statements determne if the statement is...

1. True, False or Uncertain: For each of the following statements determne if the statement is TRUE, FALSE, or UNCERTAIN. You must justify your answer either graphically or algebraically. No credit will be given without an explanation. a. "Suppose that the CPI in Japan in 2015 is equal to 180 and the CPI in the United States in 2015 is equal to 165. Then the inflation rate in Japan was higher than the U.S. inflation rate between 2014 and 2015."...
For this section, write whether the statements are True or False or Uncertain (if you say...

For this section, write whether the statements are True or False or Uncertain (if you say uncertain, have enough evidence to back your answer just as much as the true or false responses). Explain your answer and use diagrams where necessary. (a) In an oligopolistic market, two identical firms can charge more for the same product than if there were 100 markets selling the identical product. (b) In a developing country, the government can implement an interest rate cap in...
For this section, write whether the statements are True or False or Uncertain (if you say...

For this section, write whether the statements are True or False or Uncertain (if you say uncertain, have enough evidence to back your answer just as much as the true or false responses). Explain your answer and use diagrams where necessary. (a) In an oligopolistic market, two identical firms can charge more for the same product than if there were 100 markets selling the identical product. (b) In a developing country, the government can implement an interest rate cap in...

Explain the difference between a trade deficit, a current account deficit, and a balance of payments...

Explain the difference between a trade deficit, a current account deficit, and a balance of payments deficit. Explain fully why a current account deficit can be good for a country.

True, False or Uncertain: If a country is running a current account deficit, then it is...

Homework Answers

Add Answer to:
True, False or Uncertain: If a country is running a current account deficit, then it is...

Post as a guest

Earn Coins

If a country runs a surplus in financial account, its current account has a deficit. True,...

True or false: A larger current account deficit cannot occur unless the government budget deficit increases...

A current account deficit implies that the country is a net borrower with the rest of...

For this section, write whether the statements are True or False or Uncertain (if you say...

A current account surplus for a country means that a. The country earns more than it...

True/False/Uncertain. For each question, answer “True” or “False” or “Uncertain” and explain your answer. (1) In...

1. True, False or Uncertain: For each of the following statements determne if the statement is...

For this section, write whether the statements are True or False or Uncertain (if you say...

For this section, write whether the statements are True or False or Uncertain (if you say...

Explain the difference between a trade deficit, a current account deficit, and a balance of payments...

True, False or Uncertain: If a country is running a current account deficit, then it is...

Homework Answers

Add Answer to: True, False or Uncertain: If a country is running a current account deficit, then it is...

Post as a guest

Earn Coins

Add Answer to:
True, False or Uncertain: If a country is running a current account deficit, then it is...