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AP® Macroeconomics

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Impact of a Recession on International Trade and Finance

APMACR-TRAEHA

Assume the United States economy is operating at a level shown in the graph above. What would be the effects on international trade and finance?

A

The United States would move towards a current account deficit.

B

The United States would move towards a current account surplus.

C

The United States would move towards a financial account surplus.

D

The international value of the US dollar would decrease.

E

Foreign direct investment in the United States would increase.