Asked by MUHAMMAD OSAMA on Jul 26, 2024
Verified
Which of the following statements is most accurate about the U.S. current account since the Great Recession (the period covering 2009-2015) ?
A) The current account has remained the same in absolute terms, but fallen as a percentage of GDP.
B) The current account has gone from a deficit to a surplus.
C) The current account deficit has grown in absolute terms, but remained relatively constant as a percentage of GDP.
D) The current account deficit has grown in both absolute terms, and as a percentage of GDP.
Current Account
A country's transactions with the rest of the world, covering trade in goods and services, net earnings on investments, and net transfer payments.
Great Recession
A severe global economic downturn that occurred from late 2007 through mid-2009, marked by significant declines in income and employment.
Absolute Terms
Expressions or measures that are unconditional and not relative to other variables or comparisons.
- Explore the outcomes of trade deficits and surpluses on a nation's economic wellbeing.
- Acquire knowledge about the rationale and effects of large trade deficits, especially in relation to the US and its counterparts in trade.
Verified Answer
SB
Steven BoylanJul 27, 2024
Final Answer :
C
Explanation :
The U.S. current account deficit has indeed grown in absolute terms over the period from 2009 to 2015, but when measured as a percentage of the country's Gross Domestic Product (GDP), it has remained relatively stable. This indicates that while the nominal value of the deficit increased, the overall economic growth of the country kept pace, keeping the deficit proportionate to the size of the economy.
Learning Objectives
- Explore the outcomes of trade deficits and surpluses on a nation's economic wellbeing.
- Acquire knowledge about the rationale and effects of large trade deficits, especially in relation to the US and its counterparts in trade.