ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The U.S. current-account deficit, which reflects the combined balances on trade in goods and services and income flows between U.S. residents and residents of other countries, narrowed by $21.6 billion, or 9.1 percent, to $217.1 billion in the third quarter of 2022.

Detailed explanation-2: -As with many other imbalances in the world economy, the imbalances in U.S. trade and investment will not go on forever. But they can be maintained for a long period of time.

Detailed explanation-3: -A current account deficit indicates that a country is importing more than it is exporting. Emerging economies often run surpluses, and developed countries tend to run deficits. A current account deficit is not always detrimental to a nation’s economy-external debt may be used to finance lucrative investments.

Detailed explanation-4: -Advanced economies, such as the United States (see chart), run current account deficits, whereas developing and emerging market economies often run surpluses or near surpluses.