If We Import More Than We Export from the Rest

question 156

Multiple Choice

If we import more than we export from the rest of the world we

• A) can lend an equal amount to the rest of the world.
• B) are running a trade surplus.
• C) must borrow an equal amount from the rest of the world.
• D) are helping to finance investment in the rest of the world.

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Definitions:

GDP

Gross Domestic Product is a calculation that reflects the economic success of a nation by summing the value of all produced goods and services within a certain time frame.

Consumption

The use of goods and services by households, contributing to the overall demand in an economy.

Investment

The act of allocating resources, usually money, with the expectation of generating an income or profit, often through the acquisition of assets.

Government Spending

Expenditures made by the government for its operations, provision of public services, or to stimulate the economy.