Question

*Trade Deficit must exist if a country is facing a situation of Current
Account Deficit".
Defend or refute the statement, with valid argument,​

Answer 1

The given statement is refuted as the accounting Deficit (CAD) could be a broader concept.

Explanation:

• The given statement is refuted as the accounting Deficit (CAD) could be a broader concept.

• CAD occurs once the foreign exchange payments on account of visible, invisible, and current transfers are in excess over the receipts of visible, invisible, and current transfers.

• A country may face a state of affairs of CAD, even if the country features a trade surplus, with greater negative balances on account of services and unilateral transferred.

• Trade Deficit must exist if a rustic is facing a state of affairs of accounting Deficit Defend or refute the statement