Explain why a current account deficit indicates

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Problem

1. If the financial account balance must exactly offset the current account balance, why do government accountants bother to record the financial account?

2. Explain why a current account deficit indicates that a country is using more goods and services than it is producing.

3. "Direct foreign investment affects both the financial account and the current account over time." Agree? Disagree? Explain.

Reference no: EM131917668

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