The Trade Deficit Is the Mirror Image of the Required

question 184

Multiple Choice

The trade deficit is the mirror image of the required capital inflows.So why worry about these capital inflows?

• A)Trade deficits automatically cause larger budget deficits.
• B)Before long, the Germans, Japanese, and other foreigners will own the United States and will be dictating policy to the U.S.government.
• C)These capital inflows create debts on which interest and principal payments will have to be made in the future.
• D)During the period of trade deficits, personal consumption must be reduced to build up wealth to repay the debt created.

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Definitions:

Anticipatory Socialization

The process of learning and adopting the norms, values, and behaviors necessary for a future role or environment before entering it.

Uncertainty Reduction Theory

Newcomers are motivated to reduce their uncertainty so that the work environment becomes more predictable and understandable.

Social Information Processing Theory

A theory that suggests individuals adapt their attitudes and behaviors based on the social cues and information they receive from others, particularly in online environments.

Information Dependent

The state of requiring or heavily relying on information to make decisions or carry out tasks.