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Question : A current account deficit indicates that a country is spending more on imports than it is earning from______________.

Option 1: exports

Option 2: services

Option 3: capital

Option 4: investments


Team Careers360 12th Jan, 2024
Answer (1)
Team Careers360 15th Jan, 2024

Correct Answer: exports


Solution : The correct answer is (a) exports

A current account deficit indicates that a country is spending more on imports of goods and services than it is earning from its exports of goods and services. In other words, the value of goods and services imported by the country exceeds the value of goods and services exported. This results in a deficit in the trade balance, which is one of the components of the current account. The current account also includes other components such as income from investments abroad and transfers, but in the context of a current account deficit, the imbalance between imports and exports is the primary factor.

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