When U.S. real income increases, it typically leads to a _____ in the current account due to higher imports from countries like the European Union.

When U. S. real income increases, people and businesses generally have more money to spend. This often leads to higher demand for goods and services, including imports from other countries like those in the European Union. As Americans buy more imported products, the current account, which tracks the trade balance between exports and imports, usually shows a deficit because imports are greater than exports.