Q
A capital account surplus might be expected to cause a current account deficit because the associated ?
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A
A. Capital outflow would cause the nation’s currency to depreciate contributing to a trade deficit
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B
B. Capital inflow would cause the nation’s currency to depreciate contributing to a trade deficit
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C
C. Capital inflow would cause the nation’s currency to appreciate contributing to a trade deficit
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D
D. Capital outflow would cause the nation’s currency to appreciate contributing to a trade deficit
Correct Answer:
C. C. Capital inflow would cause the nation’s currency to appreciate contributing to a trade deficit
