Economics · International Trade & Balance of Payments
In a globally integrated economy, persistent current account deficits are financed through capital inflows. Consider the following statements: 1. A current account deficit implies domestic investment exceeds domestic savings. 2. Persistent deficits may lead to rising net international investment position (NIIP) liabilities. 3. A current account deficit always results in depreciation of domestic currency. Which of the statements given above are correct?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 11, 2 and 3
- 22 and 3 only
- 31 and 2 only✓
- 41 only
Correct answer
1 and 2 only
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