7.

RE: Does the current account deficit matter? (Textbook)

A current account deficit occurs when a country imports more goods, services, and income than it exports. In last 5 decades, the U.S. faced problems of a current account deficit. Recently, the U.S. runs a huge trade deficit with China. Yet, this may be compensated because:

Group of answer choices

US GNI increases as the U.S. FDI increases in China.

the U.S. are selling their military weapons to South Korea and Japan, making the US military industry rich.

The Chinese use the money that they receive from U.S. consumers to purchase U.S. assets