Which Statement Best Explains the Effect of Trade Policies on the Trade

question 142

Multiple Choice

Which statement best explains the effect of trade policies on the trade balance?

• A) Trade policies alter the trade balance because they alter imports of the country that implemented them.
• B) Trade policies alter the trade balance because they alter net capital outflow of the country that implemented them.
• C) Trade policies do not alter the trade balance because they cannot alter the national saving or domestic investment of the country that implements them.
• D) Trade policies do not alter the trade balance because they cannot alter the real exchange rate of the currency of the country that implements them.

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