This topic contains a solution. Click here to go to the answer

Author Question: Why do governments prefer to avoid current account deficits that are too large? What will be an ... (Read 107 times)

hbsimmons88

  • Hero Member
  • *****
  • Posts: 526
Why do governments prefer to avoid current account deficits that are too large?
 
  What will be an ideal response?

Question 2

For many developing countries, natural resources or agricultural commodities make up ________ share of exports
 
  A) close to no
  B) an unimportant
  C) an important
  D) close a to 5 percent
  E) close to a 10 percent



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

jliusyl

  • Sr. Member
  • ****
  • Posts: 328
Answer to Question 1

A current account deficit may pose no problem if the borrowed funds are channeled into productive domestic investment projects that pay for themselves with the revenue they generate in the future. However, sometimes, large current account deficits represent temporarily high consumption resulting from misguided government policies or some other malfunctioning of the economy. Sometimes, the investment projects that draw on foreign funds may be badly planned, etc. In such cases, the government might wish to reduce the current account deficit immediately rather than face problems in repaying its foreign debt in the future.

Answer to Question 2

C




hbsimmons88

  • Member
  • Posts: 526
Reply 2 on: Jun 30, 2018
YES! Correct, THANKS for helping me on my review


helenmarkerine

  • Member
  • Posts: 324
Reply 3 on: Yesterday
Great answer, keep it coming :)

 

Did you know?

Pubic lice (crabs) are usually spread through sexual contact. You cannot catch them by using a public toilet.

Did you know?

The immune system needs 9.5 hours of sleep in total darkness to recharge completely.

Did you know?

The term bacteria was devised in the 19th century by German biologist Ferdinand Cohn. He based it on the Greek word "bakterion" meaning a small rod or staff. Cohn is considered to be the father of modern bacteriology.

Did you know?

Bacteria have been found alive in a lake buried one half mile under ice in Antarctica.

Did you know?

Women are 50% to 75% more likely than men to experience an adverse drug reaction.

For a complete list of videos, visit our video library