5. Current account deficit Let G stand for government spending, T for taxes, I for private investment, and S for private saving. Complete the following equation for the current account deficit: Current Account Deficit = ( — )+ ( — ) Which of the following statements about the current account deficit are correct? Check all that apply. A nation should avoid a current account deficit and associated debt at all costs. Using a current account deficit to finance domestic consumption will never be a burden for a nation’s economy. A current account deficit can push current spending beyond current production. Using a current account deficit to increase domestic investment may be beneficial for a nation’s economy. Economic expansions may result in large current account deficits. Which of the following could explain the U. S. international transactions paradox? U. S. investors earn lower returns on their foreign investments than foreigners earn on their U. S. investments. Foreign purchases of U. S. securities increase long-term interest rates, hurting the U. S. economy. U. S. investors earn higher returns on their foreign investments than foreigners earn on their U. S. investments.