Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Why would a country want to avoid an excessively large current account surplus? It causes a decrease in net foreign assets It results in too
- Why would a country want to avoid an excessively large current account surplus?
- It causes a decrease in net foreign assets
- It results in too much foreign direct investment (FDI), which gives foreign companies and countries control over domestic capital
- It leads to contractionary monetary policy and higher interest rates, which decreases aggregate demand and can cause a short-run decrease in output
- It implies that domestic consumption is too high, and people are living beyond their means
- none of the above
While I just want to know why C is wrong, thanks.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started