Economics A Level: Why may High Levels of Consumer Spending lead to a Current Account Deficit?

Question

Why may High Levels of Consumer Spending lead to a Current Account Deficit?

go kys · Accepted Answer

-Economic Growth can lead to Firms and Consumers Importing more.
-Depends on Income Elasticity of Imports. If its High then Imports will be Substanial

Economics A Level

Why may High Levels of Consumer Spending lead to a Current Account Deficit?

-Economic Growth can lead to Firms and Consumers Importing more. -Depends on Income Elasticity of Imports. If its High then Imports will be Substanial

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