In the short run, a trade deficit allows more consumption, but in the long run, a trade deficit is a problem because the:
A. domestic currency will appreciate.
B. country eventually will consume more and produce less.
C. country eventually has to produce more than it consumes in order to pay foreigners their profits.
D. country eventually will sell all its financial assets to foreigners.
Answer: C
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The 2010 Patient Protection and Affordable Care Act (Obamacare) contains a provision that may require individuals to either purchase private health insurance or pay a tax. This is an example of
A) a mixed economy. B) market capitalism. C) centrally planned socialism. D) the invisible hand.
If General Motors imports parts from its plants in Canada and Mexico for finished trucks that it will sell across the NAFTA region, what type of trade does this represent?
What will be an ideal response?
The substantial risks taken by financial intermediaries like Sallie Mae because they are effectively insured are examples of what economists refer to as: a. sub-prime behavior
b. asymmetric information. c. moral hazard. d. countercyclical policy.
If the population of Country A has a higher percentage of retirees than the population of Country B, then:
a. the demand for loanable funds in Country A would be higher than the supply of loanable funds in Country B. b. the demand for loanable funds in Country A would be higher than the supply of loanable funds in Country A. c. the supply of loanable funds in Country A would be higher than the supply of loanable funds in Country B. d. the supply of loanable funds in Country A would be lower than the supply of loanable funds in Country B.