If the balance of payments accounts of a country shows a current account deficit, it means that
A. the country's foreign assets are growing more quickly than its foreign liabilities.
B. the country's exports are higher than its imports.
C. the country's foreign assets are growing more slowly than its foreign liabilities.
D. the country is acting as a net lender to the rest of the world.
Answer: C
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A) aggregate supply would shift to SRAS1 and LRAS1 would shift to LRAS0. B) aggregate supply would shift to SRAS1 and LRAS0 would shift to LRAS1. C) aggregate supply would shift to SRAS2 and LRAS0 would shift to LRAS1. D) aggregate supply would shift to SRAS1 and then return to SRAS0.
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