Which of the following is the only way to support a current account deficit in the long run?
A)borrowing from the IMF
B)selling assets to foreigners
C)divesting stock in domestic corporations
D)purchasing stocks,bonds,and real estate in other countries
E)issuing negotiable instruments like the bills of exchange

Question

Quizplus · Accepted Answer

The only way to support a current account deficit in the long run is to sell assets to foreigners, such as land, buildings, or businesses, in order to bring in foreign capital and finance the deficit. While borrowing from the IMF or issuing negotiable instruments like bills of exchange are short-term solutions, divesting stock in domestic corporations and purchasing stocks, bonds, and real estate in other countries do not address the underlying issue of a current account deficit.

Which of the Following Is the Only Way to Support