Current Account Deficit Worsens with Outflows

Steps:

• Current account tracks trade in goods/services, income, and transfers; deficit occurs when debits exceed credits.
• Increasing deficit requires actions boosting debits (outflows) or reducing credits (inflows).
• Assess each option: inflows from exports/tourism/competitiveness shrink deficit; outflows from foreign spending enlarge it.
• Identify D as sole outflow increaser.

Why D is correct:

• Military spending abroad counts as a government debit in current transfers or services, raising outflows per balance of payments definitions and widening the deficit.

Why the others are wrong:

• A: Service exports are credits, reducing the deficit.
• B: Foreign visitors boost tourism credits, shrinking the deficit.
• C: Higher competitiveness increases goods/services exports, reducing the deficit.

Final answer: D