Why Would a Government MOST Likely Be Concerned About Its

question 102

Multiple Choice

Why would a government MOST likely be concerned about its country carrying a trade deficit?

• A) A trade deficit means that the country's productivity is low.
• B) A trade deficit means local companies do not have enough competition.
• C) A trade deficit ties up money that could be used for economic growth.
• D) A trade deficit decreases demand for goods overall.
• E) A trade deficit means that consumers do not have enough purchasing power.

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Definitions:

Depreciation

A method to allocate a portion of the original cost of an asset to expense over its expected useful life to reflect its decreasing value.

Tax Rate

The slice of a corporation's or individual's income designated for tax.

Annual Costs

The total expenses incurred by an individual or organization over the course of a year.

Required Return

The minimum return an investor expects to achieve by investing in a particular asset, considering the risk involved.