The United States is currently running a large current account deficit. If Congress and the White House decided to enact policies to reduce or to eliminate the deficit, what actions should they take? Describe the set of policy options that would be available to them.

Describe the larger economic effects of the policies in the previous question. That is, what would be the effects on income, consumption, employment, interest rates, and real exchange rates of policies designed to reduce or eliminate the current account deficit?