CFA Practice Question

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CFA Practice Question

An economy with a current account deficit is effectively importing ______.

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
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