Question

An increase inflation rate for the United States relative to other countries would ____ the US's current account balance, other things equal. An increase growth in the US income level relative to other countries would ____ the US's current account balance, other things equal.

Answer 1

Answer: decrease; decrease

Explanation:

Inflation rate is simply defined as the rate at which prices of goods and services rise over time, which therefore results in a decrease in money's purchasing value.

An increase inflation rate for the United States relative to other countries would reduce the US's current account balance, other things equal. An increase growth in the US income level relative to other countries would reduce the US's current account balance, other things equal.