Current Account Deficit Driven by Outflows Steps:

• Recall current account includes trade balance (exports minus imports), net income, and transfers; deficit rises with more outflows than inflows.
• Identify factors increasing outflows: higher imports, payments abroad, or reduced inflows like exports.
• Evaluate each option's impact on outflows or inflows.
• Select the option directly causing higher payments abroad, worsening the deficit.

Why B is correct:

• Payments to countries abroad represent outflows (e.g., for imports or transfers), directly increasing the current account deficit per balance of payments definitions.

Why the others are wrong:

• A: Higher taxes reduce disposable income and consumption, lowering imports and thus decreasing the deficit.
• C: Appreciation of other countries' exchange rates makes their goods costlier, reducing imports and easing the deficit.
• D: Higher savings reduce consumption spending, decreasing imports and improving the current account balance.

Final answer: B