Trade Deficits: Impact on the US Economy
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Questions and Answers

What is the purpose of the balance of payments?

  • To predict future economic trends
  • To calculate the country's taxes
  • To summarize a country's exports and imports, investment activity, and flows of funds (correct)
  • To track the country's GDP
  • What is the current account balance in the given example?

  • 0
  • -30 (correct)
  • 30
  • 10
  • What is a trade deficit similar to?

  • Saving money
  • Borrowing (correct)
  • Earning interest
  • Investing in stocks
  • What determines whether a trade deficit is good or bad?

    <p>How we use the corresponding financial account surplus</p> Signup and view all the answers

    What is excluded from the current account?

    <p>Longer-term real and financial investments</p> Signup and view all the answers

    What is the potential benefit of a trade deficit if managed properly?

    <p>Expanding productive capacity</p> Signup and view all the answers

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