If a country is running a current account deficit year after

If a country is running a current account deficit year after year, other things being equal, what should we expect to happen to the exchange rate for that country?

Solution

At the situation of current account deficit year after year, the local currency will depriciate. This deficit shows that import of that particular country is more than its export.

If a country is running a current account deficit year after year, other things being equal, what should we expect to happen to the exchange rate for that count

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