- CFA Exams
- CFA Level I Exam
- Topic 2. Economics
- Learning Module 14. International Trade and Capital Flows
- Subject 4. The Balance of Payments
CFA Practice Question
An economy with a current account deficit is effectively importing ______.
B. past consumption and exporting present consumption
C. present consumption and exporting future consumption
A. present consumption and exporting past consumption
B. past consumption and exporting present consumption
C. present consumption and exporting future consumption
Correct Answer: C
International capital flows essentially reflect an inter-temporal trade.
User Contributed Comments 3
| User | Comment |
|---|---|
| choas69 | its so clear to the point no one bothered to write anything. |
| cumc | Me too |
| CJHughes | Deficit due to current demand; has to be paid back in the future. Will put downward pressure on future consumption |