Question: A U . S . economic indicator that concerns many investors is our balance of payment deficit. It reflects the overall relationship between a country's

A U.S. economic indicator that concerns many investors is our balance of payment deficit.
It reflects the overall relationship between a country's receipts from and payments to the rest of the world. It consists of the current account, financial account, and capital account, as noted below:
If you are a believer that our BoP deficit is not cause for concern, you would make all of the following arguments EXCEPT:
Group of answer choices
A balance of payments deficit might also indicate that foreign investors find the country attractive, leading to inflows of foreign capital to finance the deficit through investments in assets like stocks, bonds, or real estate
A deficit in the current account, which includes trade imbalances (more imports than exports), can result from factors like a strong domestic economy leading to increased imports
Persistent deficits could lead to depreciation of the dollar, an increase in the cost of imports, and potentially lead to inflationary pressures
A deficit might reflect a growing economy that's importing more goods and services to meet demand

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!