1.

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

Answer»

The given statement is refuted as the Current Account Deficit (CAD) is a broader concept. CAD occurs when the foreign exchange payments on account of visible, invisibles and current transfers are in excess over the receipts of visible, invisibles and current transfers. 

A country may face a situation of CAD, even if the country has trade surplus, with greater negative balances on account of services and unilateral transfers.



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