Question

    Which of the following will not contribute to a higher

    current account deficit? (1) Increase in price of crude oil (2) Rise in export of software services (3) Rise in import of services Choose the correct answer using the codes given below:
    A 1 and 2 only Correct Answer Incorrect Answer
    B 2 only Correct Answer Incorrect Answer
    C 3 only Correct Answer Incorrect Answer
    D 1 and 3 only Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    Current account deficit is a measurement of a country’s trade in which the value of goods and services it imports exceeds the value of goods and services it exports. Increase in crude oil price and rise in import of services oil increase the current account deficit. However increase in exports will reduce the deficit.

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