Balancing the U.K.'s Current-Account Deficit

The video discusses the current account deficit in Britain, highlighting the imbalance in income flows and trade balance. It explains the role of Sterling in addressing the deficit and the potential need for the government to redirect resources from financial services to manufacturing. The discussion includes the impact of market access to the European Union and the strategies the government might employ to manage the deficit.

What is highlighted as a major component of the current account deficit in the introduction?

• Surplus in goods and services

• Deficit in goods, services, and investment income

• Balanced trade and income flows

• Excessive government spending

How does the depreciation of Sterling help in addressing the current account deficit?

• By reducing government debt

• By increasing foreign investments

• By balancing income flows

• By increasing the trade balance

What is a significant factor contributing to the current account deficit according to the second section?

• High inflation rates

• Trade surplus

• Government policies

• Income imbalance

What might the government focus on if free access to the European market for financial services is not maintained?

• Boosting tourism

• Cutting public spending

• Redirecting resources to manufacturing

• Increasing taxes

Which sector is likely to receive redirected resources according to the final section?

• Financial services

• Agriculture

• Real estate

• Manufacturing