When a country has a current account deficit, the country A) ...

[tfester]

When a country has a current account deficit, the country
 
  A) is borrowing from abroad.
  B) is lending abroad.
  C) must have a government budget surplus.
  D) must have a government budget deficit.

Question 2

The equilibrium real interest rate in Belgium will be
 
  A) generally above the world real interest rate.
  B) generally below the world real interest rate.
  C) equal to the world real interest rate.
  D) determined by the equilibrium between desired domestic saving and desired domestic investment.

[kaylee05]

Answer to Question 1

A

Answer to Question 2

C